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2 years ago

How do stocks and bonds differ?

Business

1 answer:

Afina-wow [57]2 years ago

6 0

Answer:

D. Stocks are good for income while bonds are good for long-term growth.

Explanation:

A Stock is the smallest unit of a corporation. A stockholder is one of the owners of a corporation. Should the corporation makes profits, stockholders are entitled to dividends. Stocks are traded in the exchange markets. When the market or the corporation is doing well, stock price increases representing a capital gain to the shareholders.

Bonds are debts instruments that governments and corporates use to raise capital. They present long term investment opportunities to investors. Bonds offer regular and fixed interest payments to investors until maturity.

Stocks are riskier than bonds. Stock prices experience volatility as they trade every day. Their prices are likely to rise when the markets are favorable, which means profits to investors. Bonds are less risky and offer stable incomes for the long term.

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On June 30, a company provides $900 of services to customers on account. It usually takes the company one week to mail bills to

pav-90 [236]

Answer:

b. Debit Accounts Receivable $900, Credit Service Revenue $900

Explanation:

In this scenario, services was performed; invoice was issued. Thus revenue must be recorded in June, though customer has not paid yet

a. Debit Accounts Receivable $900, Credit Deferred Revenue $900

False, because Deferred Revenue is about the revenues received in advance for services which have not yet been performed or goods which have not yet been delivered.

b. Debit Accounts Receivable $900, Credit Service Revenue $900

True, because revenue was recorded but customer has not paid yet.

c. Debit Cash $900, Credit Deferred Revenue $900

False, because customer has not paid yet

d. Debit Cash $900, Credit Service Revenue $900

False, because customer has not paid yet

4 0

2 years ago

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have

Korolek [52]

Answer:

a. Alternative A Break-even point is 8,000 units Alternative B Break-even point is 7,500 units

b. Same profit with both alternatives at 10,000 units

c. Alternative A would have higher profit with a demmand of 12,000 units

Explanation:

a. FC/CMGu=BP

being:

FC= fixed costs

CMGu=contribution margin per unit

BP= Break even point

CMGu is the difference between price of sale and variable cost (per unit)

Alt. A Break-even point is $40,000/$5=8,000 UNITS

Alt. B Break-even point is $30,000/$4=7,500 UNITS

b. At 10,000 units both alternatives have the same profit

Alt. a.

Revenues= $150,000

Variable cost= $-100,000

Fixes Costs= $-40,000

------------------------------------

profit $10,000

Alt. b.

Revenues= $150,000

Variable cost= $-110,000

Fixes Costs= $-30,000

------------------------------------

profit $10,000

c. sales for 12,000 units

Alt. a.

Revenues= $180,000

Variable cost= $-120,000

Fixes Costs= $-40,000

------------------------------------

profit $20,000

Alt. b.

Revenues= $180,000

Variable cost= $-132,000

Fixes Costs= $-30,000

------------------------------------

profit $18,000

7 0

1 year ago

Read 2 more answers

With respect to delaying revenue recognition until completion of a long-term contract, it is the case that: Multiple Choice A) E

hichkok12 [17]

<h2>Estimated losses on the overall contract are recognized before the contract is completed. </h2>

Explanation:

Revenue recognition cannot be done prior to the completion of contract.

But the asset can be created. Only after the contract gets completed the revenue recognition can be realized.

For a long-term project, the revenue can be recognized based on the percentage of completion.

Revenue recognition keeps financial transactions aligned.

Option A: valid

Option B Invalid, because expenses are also recognized

Option C: This process is acceptable.

Option D: Gains and profits are calculated in this type of method

8 0

2 years ago

Lakeview Apartments is an 800-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $ 22

Harman [31]

Answer:

$204,080

Explanation:

The computation of operating cost is shown below:-

operating cost if occupy 55%

Cost on (800 × 90%)

= 720 units is $220,040

Cost on (800 × 80%)

= 640 Units is $215,480

Variable cost per unit = Changes in total cost ÷ High activity-Low activity

= ($220,040 - $$215,480) ÷ (720 - 640)

= 4,560 ÷ 80

= 57 per unit

Fixed cost = Total cost - Variable cost

= $220,040 - (720 × 57)

= $179,000

Cost equation:

Total cost = Fixed cost + Variable cost per unit

Y = $179,000 + 57X

Y = $1790,00 + (57 × 440)

Y = $204,080

3 0

2 years ago

Determinant Company is a price-taker and uses a target-pricing approach. Refer to the following information: Production volum

Maru [420]

Answer: good day!

Explanation: you’re awesome

3 0

2 years ago