Tutor profile: Jeelah D.
Translate how, what, when, where, and why in Tagalog.
How? = Paano? What? = Ano? When? = Kailan? Where? = Saan? Why? = Bakit?
If a merchandising entity has an income of $100,000 from its sales this year, is this considered as its revenue for the current year?
Income and revenue could be considered as synonyms, but in Accounting, they are two different words. Income is an increase in economic benefit. For example, there is an inflow that increases the assets or decreases the liabilities that result in an increase in equity rather than just mere capital investment. This definition of income includes both revenue and gains. Revenue is a principal income of the entity since it arises from the regular activities like sales revenue of a merchandising business. On the other hand, gains are the other items that meet the definition of the income but does not arise from its regular activities. An example of this is a gain on the disposal of the entity's used equipment. So, to answer your question, the $100,000 sales revenue is considered as the entity's income for the current year. Take note that it is not the other way around. Also, remember that income does not only include revenues.
A bookstore normally offers 20% student discount on all the items it sells. Bob, a student, bought books worth $380 during a back-to-school sale wherein the bookstore deducts an additional 5% off the discounted price for students. How much is the original price of the books that Bob bought?
What is asked? The original price of the books is asked. Let's assign a variable to this. x = original price of the books What are the given facts? $380 = overall discounted price 20% student discount on its original price. 5% back-to-school discount on the discounted price for students. What operation to use? Multiplication: to get the value of the discount, multiply the discount percentage to the price Subtraction: to get the discounted price, deduct the discounted value from the price Formula? x - 0.20x - 0.05 ( x - 0.20x ) = $380 Explanation: x - 0.20x is to get the price net of student discount, but you still need to deduct the additional 5% back-to-school discount which is 5% of the original price net of student discount, hence, 0.05 ( x - 0.20x ). This explains the left side of the equation. The right side of the equation, on the other hand, is the given value for the overall discounted price. Solution: x - 0.20x - 0.05 ( x - 0.20x ) = $380 Distribute 0.05 by multiplying it to x - 0.20x. x - 0.20x - 0.05x + 0.01x = $380 Combine like terms. 0.76x = $380 Divide both sides of the equation by 0.76 to find x. x = $500 Answer: x = $500 Original price of the books = $500 You can check if the answer is correct by substituting it to the variable x in the equation. $500 - 0.20 ($500) - 0.05 [ $500 - (0.20) ($500) ] = $ 380 $500 - $100 - 0.05 ( $500 - $100 ) = $ 380 $500 - $100 - 0.05 ( $400 ) = $ 380 $500 - $100 - $20 = $ 380 $380 = $380 Thus, we got the right answer!
needs and Jeelah will reply soon.