17.11 The accountant at Investotech discovered the following errors after calculating the company's profit for 20X3: (a) A non-current asset costing $50,000 has been included in the purchases account Stationery costing $10,000 has been included as closing inventory of raw materials, instead of stationery expenses (b) What is the effect of these errors on gross profit and net profit? Understatement of gross profit by $40.000 and understatement of net profit by $30,000 Understatement of both gross profit and net profit by $40,000 Understatement of gross profit by $60.000 and understatement of net profit by $50,000 C

Q: What is the difference between ER and REA model

A: ER model stands for Entity Relationship model which is a high-level data model. This model defines…

Q: Give two examples of errors of principle?

A: Errors of principle refers to errors that are carried out at time of noting down transactions…

Q: From where has the concept DU pont Analysis comes?what’s the formula?

A: Ratio Analysis is the method of checking the company's operational efficiency, liquidity, and…

Q: what does fichacuristic mean?

A: NOTE: The word "fichacuristic" is a spelling/typo error of the word "futuristic" in Step 2 first…

Q: Explain in detail, using examples where possible, the difference between hedging, speculation

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Q: Briefly explain the assumptions of CAPM

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Q: What is differential analysis?

A: Differential analysis: An analysis which only considers changes in income and expenses of an entity…

Q: What is the purpose of a Limit Test?

A: Definition:   Limit test: It checks the data by evaluating it with the predetermined upper and…

Q: Why option A is incorrect?

A: revenue is generated by the business whenever  goods or services are sold by the business.this leads…

Q: Highlight concept of faithful representation and is it valid or not?

A: The concept of Faithful representation advocates that the financial statements and information…

Q: purpose of FA

A: FASB stands for Financial Accounting Standards Board. It is a non-profit organization that follows…

Q: What’s the AMT, and what is its purpose?

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Q: What are the two inputs required in the preparation of the pro forma statements?

A: Pro forma financial statements are reports that are formed based on hypothetical situations in the…

Q: What are the key assumptions of the CAPM?

A: Introduction: The CAPM is an equilibrium model that stipulates the relationship between necessary…

Q: What assumptions are inherent in the EOQ model as presentedhere?

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Q: What is the dual aspect term

A: solution concept Dual aspect                 Each and every transaction shall be recorded by giving…

Q: What is a condition subsequent? Briefly explain with examples.

A: Condition subsequent: Condition subsequent refers to an event which bring an contract to an end…

Q: es RTN hold any importan

A: In online transactions are done based on codes and codes are given for the name of bank and area of…

Q: What are the assumptions and criticisms of Gordon’s model?

A: Gordon's model, also known as the Gordon Growth Model, is a widely used method for valuing stocks.…

Q: What is counterbalancing?

A: Errors: The comparability and consistency of the financial statements decreases when a company…

Q: What are the assumptions of Walter’s model?

A: The Walter Model of Careers is an influential theory in the field of career development. This model…

Q: part b is incorrect. Can you rework it?

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Q: What does it mean for a source to be objective?

A: Objective means anything which is free from emotions, personal prejudices or bias.

Q: what is a provable intrinsic value? can you give a example

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Q: What is the confirmation process?

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.