Trade Restrictions and Exchange Rates: Impact on Global Commerce
Trade Without Restrictions: Disadvantages of Restrictions
- Higher prices for consumers.
- Fewer choices for consumers.
- Protectionism often leads to retaliation, resulting in higher import prices and, consequently, higher consumer prices.
- Higher prices can lead to lower overall demand, causing job losses in other industries.
Trade With Restrictions
- Protection of national defense and citizens’ health.
- Protection against dumping.
- Potentially lower prices for consumers in specific cases.
- Protection for new and
Accounting Entries: Sales, Returns, and Adjustments
1. Credit Sale with Discount and Returnable Packaging
- A sale of goods on credit for 1,500 euros was made. The invoice includes a discount of 150 euros. The goods are contained in returnable packaging, which is billed at 200 euros.
1,798.00 | 430 | Customers [(1,350 + 200) * 1.16] | to to to | Sales of Merchandise (1,500 – 150) Packaging and Containers to be Returned by Customers Output VAT [(1,350 + 200) * 0.16] | 700 437 477 | 1,350.00 200.00 248.00 |
2. Fire Loss of Returnable Packaging
- A fire in the warehouse destroyed returnable
Financial Accounting: Principles and Practices
1. Financial Accounting Fundamentals
Financial accounting is:
B) An information system for business decision-making
Which of the following users is more interested in profitability?
A) Stockholders
Which of the following users is more interested in liquidity?
B) Creditors
Which is not a financial statement?
C) Ledger
The activity of raising funds for the company is known as:
C) Financing
The activity of purchasing the necessary assets is known as:
A) Investing
The statement which reports the economic and financial
Read MoreEffective Working Capital Management and Cash Flow Analysis
Working Capital
Accrual
- Revenue is recorded when earned (even if the money is not received)
- Expenses are recorded when the goods and services are received (even if the money is not yet paid)
- Do not rely on the income statement, but look at the cash flow statement
- Accounting profit may not reflect the cash flow reality facing the firm
- The cash flow statement helps to provide a clearer picture of where cash is coming from and where it is going
Working Capital Formula
- Current Assets – Current Liabilities
- (
Bond Amortization, Uncollectible Accounts, and Depreciation
Bond Issuance and Amortization
Ashley Addison Company issued $600,000 of 10%, 5-year bonds at 108. Interest is paid annually, and the effective interest method is used for amortization. The market rate is 8%. The bonds are issued on the date of the bonds.
- Amount received for the bonds? $648,000 (600,000 * 1.08)
- Interest paid each interest period? $60,000 (600,000 * 0.10)
- Premium amortization for the first interest period? $8,160 [60,000 – (648,000 * 0.08)]
- Bond interest expense recorded on first interest
Understanding Financial Statements: Assets, Liabilities, and Equity
T.12 The Balance Sheet
The balance sheet reflects the assets and rights that constitute the assets of the company and the funding sources that comprise the net patrimony and liabilities. It is a static document that refers to the situation of the company at the date of financial close. This document is made from the balance sheet accounts, the first five groups of the General Accounting Plan (PGC). Systematized information is included in the closing entry accounting made in the journal.
Companies
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