A Number of Unrelated Transactions Recorded by National Company Are

question 85

Essay

A number of unrelated transactions recorded by National Company are as follows: Instructions
For each of the above situations, identify the accounting assumption, concept, constraint or recognition criteria that have been violated. Prepare the correct journal entry as it should have been made. If no entry should have been made, or if additional financial statement disclosure is required, explain.

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Definitions:

Diminishing Returns

A rule indicating that after reaching a specific threshold, further investments in a given sector will not yield higher profits at the same rate if all other factors stay unchanged.

Marginal Cost

The heightened expense incurred by fabricating an extra unit of a product or service.

Average Total Cost

The overall expense of manufacturing, including both fixed and variable costs, divided by the amount of product made.

Extra Unit

Refers to an additional quantity of a good or service, often used in the context of calculating marginal costs or benefits.