Guardian Corp

question 96

Multiple Choice

Guardian Corp.sells $6,250 of goods on account in the current year and collects $3,250 of this.It incurs $4,200 in expenses on account during the current year and pays $2,600 of them.Guardian would report what amount of net income under the cash and accrual bases of accounting, respectively?

• A)$2,050 on the cash basis and $3,000 on the accrual basis
• B)$3,250 on the cash basis and $4,200 on the accrual basis
• C)$3,000 on the cash basis and $1,600 on the accrual basis
• D)$650 on the cash basis and $2,050 on the accrual basis

Recognize the relationship between consumer surplus and market dynamics including price and quantity.

Distinguish between elastic and inelastic demand and their impacts on consumer behavior.

Analyze the effects of changes in preferences and market price on consumer surplus.

Understand the definition and implications of substitutes and complements in consumer choice.

---

Definitions:

Standard Costing System

An accounting system that assigns fixed costs to products based on standard assumptions about the production process.

Variance Accounts

Accounts used in managerial accounting to record the differences between actual costs and standard (budgeted) costs.

Direct Material Price Variance

The difference between the actual cost of direct materials and the standard cost multiplied by the actual quantity used.

Costs Of Goods Sold

Direct costs attributable to the production of goods sold by a company, including materials and labor, but excluding indirect expenses such as sales and distribution costs.