Answer: b. debited; credited
Explanation:
Deferred revenue has been paid to the company but the company does not recognize it as revenue yet because the goods or services it was paid for have not been delivered yet. It will therefore be classified as a liability until the goods or services are delivered. It will therefore be credited because increases in liabilities are credited.
Accounts Receivable is an asset account and as such any increase in it will be debited.
Businesses in a country are listed by size: small, medium, and large. Explain why business size is an example of an ordinal-scaled variable.
Answer:
The business-size contain values that may be used as a rank or order of a categorical variable.
Explanation:
Business size is an example of an ordinal scaled variable because it has a value that is used to rank the categorical variables. However, the variable size in the business is used to categorizing the business in small, medium, and large forms. moreover, the ordinal scaled variable exhibits the variables where the order matters but the difference between orders does not matters. That is why business size is an ordinal scaled variable.
Explain why the following are examples of monopolistic competition.
a) There are a number of fast-food restaurants in town, and they compete fiercely. Some restaurants cook their hamburgers over open flames. Others fry their hamburgers. In addition, some serve broiled fish sandwiches, while others serve fried fish sandwiches. A few serve ice cream cones for dessert, while others offer frozen ice cream pies.
b) There are a vast number of colleges and universities across the country. Each competes for top students. All offer similar courses and programs, but some have better programs in business, while others have stronger programs in the arts and humanities. Still others are academically stronger in the sciences.
Answer: In both situations, several companies are offering similar but not identical products, which means there is an imperfect competition.
Explanation:
In businesses, monopolistic competition occurs if different businesses offer differentiated products. This means that even when products are similar they have unique characteristics that cause one product cannot replace others. This occurs in the two examples presented because features such as different methods to cook hamburgers, or products such as fish sandwiches or ice cones in the first example make each of the restaurants to have differentiated products. This also applies to the second example, as some colleges are better in business, others in arts, others in science, etc.
Moreover, in monopolistic competition, there is imperfect competition because due to the differences in products the product of one business cannot directly compete or replace the products of another. Also, this causes the prices can be increased.
Seafood Trading Co. commenced operations during the year as a large importer and exporter of seafood. The imports were all from one country overseas. The export sales were conducted as drop shipments and were merely transshipped at Seattle. Seafood Trading reported the following data: Purchases during the year $12.0 million Shipping costs from overseas 1.5 million Shipping costs to export customers 1.0 million Inventory at year end 3.0 million What amount of shipping costs should be included in Seafood Trading’s year-end inventory valuation? A. $250,000 B. $0 C. $1,125,000 D. $375,000
Answer:
D. $375,000
Explanation:
given data
Purchases during the year = $12.0 million
Shipping costs from overseas = 1.5 million
Shipping costs to export customer = 1.0 million
Inventory at year end = 3.0 million
solution
we get here Seafood Trading’s year-end inventory valuation.
and we know here that shipping cost to export to customers is selling expense but not include the inventory.
so
shipping costs = ( Inventory at year-end ÷ Purchases during the year ) × Shipping costs from overseas ..................1
put here value and we get
shipping costs = [($3.0 million ÷ $12.0 million) × $1.5 million]
shipping costs = $375,000
Consider an industry that is made up of nine firms each with a market share (percent of sales) as follows: a. Firm A: 30% b. Firm B: 20% c. Firms C, D, and E: 10% each d. Firms F, G, H, and J: 5% each What is the value of the Herfindahl-Hirschman Index and how is the industry categorized?
Answer:
Herfindahl-Hirschman Index is 1400 and the industry is categorized as a competitive industry
Explanation:
The Herfindahl-Hirschman Index is a market indicator that is used to measure how competitive the companies or firms in an industry is. It tells whether the industry is highly competitive or monopolistic.
It is obtained by adding the square of the market share of all the firms in an industry. That is,
Herfindahl-Hirschman Index (HHI) = s1 + s2 + s3 +....... sn
(where s = market share of individual firms in an industry.)
From the question,
Herfindahl-Hirschman Index (HHI) = (30)² + (20)² + 10)² +(10)² + (10)²+ (5)²
+ (5)²+ (5)² + (5)²
= 600 + 400 + 100 +100 + 100 + 25 + 25 +
+ 25 + 25
= 1400
An industry with an Herfindahl-Hirschman Index of less than 1500 units is categorized as a COMPETITIVE INDUSTRY.
One with an index of between 1500 to 2500 is considered as moderately competitive.
While an industry with higher values of HHI tends towards a monopoly.