Answer:
Explanation:
The concept of ethical marketing refers to the way in which companies and / or enterprises market their goods and services: the focus does not only revolve around the benefits of their offer for customers, but also on how they impact on causes and / or responsible actions with society and / or the environment ..
\AllCity, Inc., is financed 40% with debt, 8% with preferred stock, and 52% with common stock. Its cost of debt is 5.7%, its preferred stock pays an annual dividend of $2.49 and is priced at $30. It has an equity beta of 1.15. Assume the risk-free rate is 1.7%, the market risk premium is 7.3% andAllCity's tax rate is 35%. What is its after-tax WACC? [Note: Assume that the firm will always be able to utilize its full interest tax shield.]
Answer:
WACC = 6.38%
Explanation:
Cost of equity = 1.7% + (1.15 x 5.6%) = 8.14%
Weight of equity = 52%
After tax cost of debt = 5.7% x (1 - 35%) = 3.705%
Weight of debt = 40%
Cost of preferred stock = $2.49 / $30 = 8.3%
Weight of preferred stock = 8%
WACC = (8.14% x 0.52) + (3.705% x 0.4) + (8.3% x 0.08) = 6.3788% ≈ 6.38%
Rare earth metals are used in the production of many of the personal electronic devices you use every day. Suppose there is an unexpected decrease in the price of rare earth metals. a. The decrease in price of rare earth metals will lead to negative cost-push inflation. demand-pull inflation. an increase in expected inflation. negative demand-pull inflation. b. Illustrate the effect of the decrease in the price of rare earth metals by making the appropriate adjustments to the Phillips curve.
Answer:
a. negative cost-push inflation
b. Phillips Curve will shift right
Explanation:
a. Cost push inflation occurs when the costs of inputs such as wages and material costs increases. This leads to an increase in prices because producers will have to increase prices to make a profit.
In this scenario, material prices dropped instead of increasing. A negative cost-push inflation will therefore happen.
b. This will lead to a shift right in the Phillips curve to reflect that inflation has fallen. It will increase the output gap between Potential and Actual GDP because a lower inflation means more unemployment which means the economy is shrinking.
The black dot will shift right to (0, -2)
Suppose a less developed country is having difficulty making payments on its foreign debts. What option does this nation have?
Targ
It can ask its lenders for more loans in exchange for accepting a foreign portfolio investment from the World Bank.
It can ask its lenders to forego the payments until the economy of the debtor nation is stronger.
It can ask its lenders to forgive the loans in exchange for accepting temporary control by the lender nation.
It can ask its lenders for debt rescheduling in exchange for accepting a stabilization program from the IMF.
Answer:
it can ask its lenders for dept resceduling in exchange for accepting a stabilization program from the IMF
Explanation:
gradpoint
What type of arrangement(s), if any, would avoid double taxation for Wendall's and Shirley's endeavor? Choose the best answer if the choices below.
Answer:
An s corporation or a limited liability company, but not a corporation.
Explanation:
According to your question, is An S corporation, a limited liability company, or a corporation? Therefore Option D is correct.
What is Liability?Accounts payable, wages and taxes are examples of current obligations, which are sums owed for ongoing costs. Current obligations will also include payments on long-term debt due in the following year.
Liabilities include things like -
a bank loan
a mortgage loan
Payment due to suppliers (accounts payable)
Paid wages
tax debt
Liabilities are listed on a company's balance sheet. The entire number of liabilities must match the difference between the total amount of assets and the total amount of equity, according to the accounting equation.
Hence, An S corporation, a limited liability company, or a corporation is correct according to the question.
To know more about Liability follow the link.
https://brainly.com/question/27843625
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Your Question was incomplete but most probably your question was.
What type of arrangement(s), if any, would avoid double taxation for Wendall's and Shirley's endeavors? Choose the best answer if the choices below.
A. A corporation
B. A limited liability company
C. An S corporation
D. An S corporation, a limited liability company, or a corporation
E. An S corporation or a limited liability company, but not a corporation
Logistics is concerned Multiple Choice with flows of materials, finished products, and information. only with the flow of information, not the flow of materials and products. with the flow of materials to the manufacturer and with the flow of finished products to the consumer, but not with the flow of information. only with the flow of finished goods from the producer to the final consumer.
Answer:
Option A
Explanation:
Logistics is concerned with the flow of goods (raw material and finished products) to the consumer and the producer.
However, the entire process of logistics involve Flow of physical items as well as abstract items inclusive of time, information, particles, and energy
Hence, option A is correct
James has a large farm. He often gets together with a nearby neighbor who raises chickens. When they meet that trade vegetables for chicken and eggs. No money changes hands. They have made trades like this since their parents own the land and have continued the trades. What type of economy is being described?
user add controls to a form
Answer: meeeeep
Explanation:
Manoel
In a college-level course, Mrs. Smith gives the lectures, sets the due dates, and is the expert on the material. Mr. Doe helps grade papers, offers tutoring sessions for the students, and attends the lectures. Which best describes the two instructors?
Mrs. Smith is a postsecondary teacher, and Mr. Doe is a teaching assistant.
Mr. Doe is a postsecondary teacher, and Mrs.Smith is a teaching assistant.
Mrs. Smith is a high school teacher, and Mr. Doe is a teaching assistant.
Mr. Doe is a high school teacher, and Mrs. Smith is a teaching assistant.
Answer:
Mrs. Smith is a postsecondary teacher, and Mr. Doe is a teaching assistant.
Explanation:
Mrs. Smith gives the lectures, sets the due dates, and is an expert on the material of a "college-level course", therefore, she has to be a postsecondary teacher, as the teacher is responsible for giving the lectures, and has to be an expert on the material.
Mr. Doe helps grade papers, offers tutoring sessions for the students, and attends the lectures. From my experience and the phrase "helps grade papers" rather than just "grades the papers", we can conclude that Mr. Doe is the teaching assistant.
Answer:
A
Explanation:
difference between transport business and drink business
Answer:
a transport business uses (preferably semi's) any vehicles to transport one item from one place to another. a drink business is a place/product ( drinks (soft or alcoholic) and you sell them to make a profit
transport business is both cheaper and easy to set up and run.
Rollins Corporation is estimating its WACC. It's current and target capital structure is 20
percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12
percent coupon rate, paid semiannually, a current maturity of 20 years, and sell for $1,040. The
firm could sell, at par, $100 preferred stock which pays a $12.00 annual preferred dividend.
Rollins' common stock beta is 1.2, and the risk-free rate is 10 percent. Rollins is a constant-
growth firm which just paid a dividend of $2.00. Its stock sells for $27.00 per share, and has a
growth rate of 3 percent. The floatation cost is 5% for debt, 10% for preferred stock, and 25%
for common stock. The firm's marginal tax rate is 40 percent.
Question 1 (worth 15 out of 100 possible points for the quiz)
Part a. Calculate the cost of existing debt.
Part b. Calculate the cost of new debt.
Answer:
i dont get it, all words are distinguish
Explanation:
Which of the following statements about cash versus accrual accounting is most correct? A. In cash accounting, an event is recognized when a cash transaction occurs. B. In accrual accounting, an event is recognized when a cash transaction occurs. C. Most large healthcare organizations use cash accounting because it presents a better picture of the economic status of the organization. D. Most small healthcare organizations use accrual accounting because it closely matches statements required for income tax purposes. E. In cash accounting, an event is recognized when the obligation for a cash transaction is created.
Answer:
In cash accounting, an event is recognized when a cash transaction occurs
Explanation:
Account
This is simply a place to summarize all of the transactions that influence or affect one particular asset, liability, equity, revenue, expense, gain, or loss item.Cash are said to be asset.
Cash Accounting (COST)
This usually show (recognize) revenues and expenses when cash is physically paid or received even if or when transaction do happens. That is it will record only those transactions that affect cash ( only when someone gives or receives cash). It is very common in smaller business and can be a little inaccurate.
Accrual Accounting on the other hand, record revenue when sale is made and not when cash received. It also records expense when they arise and not when they are paid. It links revenues to when they were earned, while expenses when they are incurred. It is very common in bigger business and said to be more accurate indication of performance.
An accountant's ability to audit a company's records is an example of what type of skills?
Answer:
technical skills
An accountant's ability to audit a company's records is an example of what type of skills? technical skills. Camille Graham is a manager who works well with people and makes them feel excited about their work.
Explanation:
Hope it helps! Correct me if I am wrong!
I'm sure about my answer!
If you dont mind can you please mark me as brainlest?
Its ok if you don't want to!
But i hopefully it helps you!
Your company, a small start-up corporation, buys raw materials from Regina Fabrics on credit. Because her company has had several problems over the recent months, Regina demands either full payment in advance or a guaranty from someone with proof of assets to cover the debt. Your company does not have the cash on hand but you have sufficient assets to cover the debt and so you sign a guaranty on a six-month loan for the fabric. After two months, your company has the cash to pay off the loan and your financial officer offers to pay Regina. Because of some issues with her company, she refuses to accept payment and requests that you continue to pay the monthly payments. A month later your company is now short on cash and Regina comes to you as the guaranty and requests that you make the payment. You are unhappy that she didn't accept the payment when you had the cash. Evaluate whether or not you should have to pay as the guaranty.
Answer: See explanation
Explanation:
I believe that the main thing here that can favor my company is if there's documentation for every process involved with my dealings with Regina Fabrics.
This could have been solved if she didn't reject the cash that was offered to her company after two months, so there should be a formal documents that shows that she rejected the cash which should be acknowledged and signed by her. Also, the monthly payments received by her should be documented as well.
With regards to the above, if there is a formal documentation in place, then I won't have to pay as the guaranty but if this isn't in place, then I may have to pay since there won't be evidences against her.
Flash ECard Manufacturing manufactures software parts for the computer software systems that produce ecards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part and the plant has excess capacity to produce the Flash II part. The current market price of the Flash II part is $700. The managerial accountant reported the following manufacturing costs and variable expense data: Flash ECard Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials $810 Direct labor $160 Variable manufacturing overhead $140 Fixed manufacturing overhead (current production level) $185 Variable selling expenses (only incurred on sales to outside consumers) $136 If the highest acceptable transfer price is $700 in the market, what is the lowest acceptable inhouse price the Data Department should receive to produce the part inhouse at the Computer Department? "810"
Answer:
the lowest acceptable inhouse price the Data Department is $1,110
Explanation:
The computation of the lowest acceptable inhouse price the Data Department is shown below:
= Direct materials + direct labor + Variable manufacturing overhead
= $810 + $160 + $140
= $1,110
Hence, the lowest acceptable inhouse price the Data Department is $1,110
The above formula should be applied for determining the lowest acceptable inhouse price is as follows:
"The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make annual deposits of $150,000 into a special bank account at the end of each of 10 years beginning December 31, 2021. Assuming that the bank account pays 6% interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2030?"
Answer:
FV= $1,873,697.4
Explanation:
Giving the following formula:
Annual deposit= $150,000
Number of periods= 9 years compound periods (10 deposits)
Interest rate= 6%
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {150,000*[(1.06^9) - 1]} / 0.06 + 150,000
FV= 1,723,697.4 + 150,000
FV= $1,873,697.4
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.12 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio
Answer:
Beta for the other stock = 1.88
Explanation:
A portfolio is said to be as risky as the market where its beta is exactly equal to 1. A beta of greater than 1 implies the portfolio is riskier than the average market, and less risky where the beta is less than 1.
A portfolio that has an equal proportion of three asset would mean a weight of 1/3 for each asset
So we can represent the portfolio beta as follows:
1 = 1/3×(0) + 1/3× (1.12) + 1/3×y
1= 0.37 + 0.33y
0.33y = 0.626
y= 0.626/0.33
y= 1.88
Beta for the other stock = 1.88
a stock analyst wants to use a dividend pricing model to value stock. the analyst believes will pay its first dividend in exactly 15 years, and she is guessing that the dividend will be $10.00 per share at that time. the analyst assumes that dividends will grow by 5% per year going forward after year 15. the required return to hold is estimated to be 12% per year. based on these assumptions, what is the intrinsic value of stock today
Answer:
P0 = $27.4044 rounded off to $27.40
Explanation:
The constant growth model of dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under constant growth DDM is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 * (1+g) is the dividend expected in Year 1 or next year g is the constant growth rate in dividends r is the discount rate or required rate of return
To calculate the price of the stock today, we firsts need to calculate the price of the stock in year 15 and discount it back to today's value.
As we can see that to calculate the price of the stock today, we use dividend that is expected for the next period or Year 1. Thus to calculate the price of the stock in Year 15, we will use the dividend that will be expected in Year 16.
P15 = D15 * (1+g) / (r - g)
P15 = 10 * (1+0.05) / (0.12 - 0.05)
P15 = $150 per share
To calculate the price of this stock today, we must discount the Year 15 price to today's price.
P0 = P15 / (1+r)^15
P0 = 150 / (1+0.12)^15
P0 = $27.4044 rounded off to $27.40
Mongar Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below: Original Budget Actual Costs Variable overhead costs: Supplies $ 7,980 $ 8,230 Indirect labor 29,820 29,610 Total variable manufacturing overhead cost $ 37,800 $ 37,840 The original budget was based on 4,200 machine-hours. The company actually worked 4,350 machine-hours during the month and the standard hours allowed for the actual output were 4,190 machine-hours. What was the overall variable overhead efficiency variance for the month
Answer:
Variable overhead variance = $1,440 unfavorable
Explanation:
The variable overhead efficiency variance is the difference between the actual hours and the standard hours for the actual output valued at the standard variable overhead rate per hour.
Machine hours
standard hours for the actual output 4,190
Actual hours 4,350
Efficiency variance 160 unfavorable
Standard rate per hour(see note) × $9
Variable overhead variance 1,440 unfavorable
Standard variable rate per machine hour
= Budgeted overhead cost/Budgeted machine hour s
= $37,800/4,200 hours =$9 per machine hour
Variable overhead variance = $1,440 unfavorable
You decide that structural changes must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams. What should you do? Select an option from the choices below and click Submit. Merge the independent procurement teams of each SBU into a single procurement division serving all product lines. Create a cross-department team to investigate in depth how the problems arose and to offer suggestions on how to deal with them. Merge the three marketing teams of each SBU into a single marketing division serving all product lines.
Answer:
One of the required structural changes that must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams is:
Merge the three marketing teams of each SBU into a single marketing division serving all product lines.
Explanation:
The marketing department is not a product-based team. Therefore, a marketing team should not be tied to just one SBU. The SBU structure can be continued. But the combination of the marketing teams into a single group creates synergy, avoids effort duplication, reduces competitiveness among the various teams, and above all, helping the group' brand managers to utilize accumulated resources, knowledge,and information of the entire marketing organization for the benefit of the different SBUs.
In the Assembly Department of Concord Company, budgeted and actual manufacturing overhead costs for the month of April 2020 were as follows. Budget Actual Indirect materials $15,700 $15,100 Indirect labor 21,900 22,500 Utilities 10,100 10,900 Supervision 5,900 5,900 All costs are controllable by the department manager. Prepare a responsibility report for April for the cost center.
Answer: See explanation
Explanation:
The responsibility report for April for the cost center is analysed below:
CONCORD COMPANY
Manufacturing Overhead Cost Responsibility Report For the Month Ended April 30, 2020
Controllable Cost Budget Actual.
Difference
Indirect materials $15,700 $15,100 $600 Favorable
Indirect labor 21,900 22,500 600 Unfavorable
Utilities 10,100 10,900 800 Unfavorable
Supervision 5,900 5,900 0
On April 30, 2019, Macy Products purchased machinery for $132,000. The useful life of this machinery is estimated at 5 years, with a $32,000 residual value. The company uses the double-declining-balance method. Depreciation expense for the fiscal year ending on December 31, 2020 will be:
Answer:
$38,720
Explanation:
Depreciation Expense = 2 x SLDP X BVSLDP
where,
SLDP = 100 ÷ number of useful life
= 100 ÷ 5
= 20 %
2019
Annual Depreciation Expense = 2 x 20 % x $132,000
= $52,800
But, depreciation expired for only 8 months from April 30, 2019 to December 31, 2019 during the year, therefore
Depreciation Expense = $52,800 x 8/12 = $35,200
2020
Annual Depreciation Expense = 2 x 20 % x ($132,000 - $35,200)
= $38,720
Conclusion :
Depreciation expense for the fiscal year ending on December 31, 2020 will be $38,720
In order to sell a product at a profit, the product must be priced higher than the total cost to build the unit, plus period expenses and overhead. At the end of last year, Chester had their product Cake aimed at the Low End segment. Cake's production cost (labor + materials) last year was $14.07 ($5.89 unit labor cost and $8.18 unit material cost). Exclude possible inventory carrying costs. Assume period expenses and overhead total 50% of their production cost. What is the minimum price the product could have been sold for in the American region to cover the unit cost, period expenses, and overhead?
Answer:
Chester Cakes
The minimum price the product could have been sold for in the American region to cover the unit cost, period expenses, and overhead is:
= $21.11.
Explanation:
a) Data and Calculations:
Production cost:
Labor per unit = $5.89
Materials per unit 8.18
Total production cost $14.07
50% Overhead 7.04
Minimum price = $21.11
b) The minimum price for a unit of the cake includes the total variable production cost and the determined 50% overhead on the production cost to cover period expenses and other overhead costs.
what is the most important contribution of the hawthorne studies
The Hawthorne studies taught managers that communication with the employees is essential for higher productivity and efficiency. One theory in the human relations subject which is criticised is Maslow's hierarchy of needs.
Bombeck Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Aug. 1 Opens an office as a financial advisor, investing $5,000 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,800 cash. 16 Receives $1,900 from clients for services performed. 27 Pays secretary $1,000 salary.
Answer: Please see answers in explanation column
Explanation:
Date Accounts titles and explanation Debit Credit
Aug 1 Cash $5000
Common Stock $5000
--Since this is an investment by the owner of the business . When the business is gaining cash, it is being debited as it is an asset which is always debited with increase. Also there will be an increase in the owner's Equity Account leading to crediting the Common stock (equity) account.
Date Accounts titles and explanation Debit Credit
Aug 4 Prepaid Insurance $1800
Cash $1800
--The insurance paid in 6 months advance is an asset for the business. As stated above when asset increases, it is debited in the account journal So, prepaid insurance account is being debited . Also,since cash is being reduced as it is used for payment for insurance, it is credited in the accounts journal.
Date Accounts titles and explanation Debit Credit
Aug 16 Cash $1,900
Service Revenue $1,900
--The amount of $1,800 is the revenue for service rendered and since it is an equity account which increased revenue, we credit it. Also, since cash is being received, because it is an asset, debit is recorded on the cash account.
Date Accounts titles and explanation Debit Credit
Aug 27 Salary Expense $1000
Cash $1000
--Payment of salary is an expense to any business and paid from the business Cash Account causing a decrease in the Cash, since Cash is referred to an asset , because of its decrease, we credit the Cash Account. Also, the salary expense account is debited because it is increasing
Purdum Farms borrowed $14 million by signing a five-year note on December 31, 2017. Repayments of the principal are payable annually in installments of $2.8 million each. Purdum Farms makes the first payment on December 31, 2018 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2018, after the first payment is made
Answer and Explanation:
The amount that should be reported as the current liabilities and long term liabilities is shown below:
The borrowed amount is $14 million
And, the installments is of $2.8 million each
He makes the first payment and then made the balance sheet
So, the current liability amount is $2.8 million
And, the long term liability amount is ($2.8 × 3 years) $8.4 million
So the same would be considered and relevant too
How the experience affects buyer behavior.
Answer:
because it does
Explanation:
A
Answer:
Situational influences are temporary conditions that affect how buyers behave. They include physical factors such as a store's buying locations, layout, music, lighting, and even smells. Companies try to make the physical factors in which consumers shop as favorable as possible.
Explanation:
On December 31, 2018, a company had assets of $20 billion and stockholders' equity of $16 billion. That same company had assets of $40 billion and stockholders' equity of $13 billion as of December 31, 2019. During 2019, the company reported total sales revenue of $13 billion and total expenses of $11 billion. What is the company's debt-to-assets ratio on December 31, 2019
Answer:
62.50 %
Explanation:
Debt-to-assets ratio = Interest bearing debt / total assets x 100
where,
Accounting Equation :
Assets = Equity + Liability
also stated,
Liability = Assets - Equity
therefore
Interest bearing debt = Assets - Equity
Equity = Stocks + Retained Earnings
for 2019
Equity = $13 billion + ($13 billion - $11 billion) = $15 billion
Interest bearing debt = $40 billion - $15 billion = $25 billion
therefore,
Debt-to-assets ratio = $25 billion / $40 billion x 100 = 62.50 %
Conclusion
The company's debt-to-assets ratio on December 31, 2019 is 62.50 %
_____________ is when your company makes an effort to actively control and shape your brand image with your target market.
A.
Market penetration
B.
Market segmenting
C.
Data mining
D.
Market positioning
Answer:
D. (Market positioning)
Explanation:
The definition is pretty much in the question itself! hope this helps
Bramble Corp. makes and sells umbrellas. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available: Variable Cost Per Unit Sold Monthly Fixed Cost Sales commissions $0.60 $ 6000 Shipping 1.20 Advertising 0.30 Executive salaries 39000 Depreciation on office equipment 7200 Other 0.35 24000 Expenses are paid in the month incurred. If the company has budgeted to sell 6000 umbrellas in October, how much is the total budgeted variable selling and administrative expenses for October
Answer:
$93,840
Explanation:
Calculation to determine how much is the total budgeted variable selling and administrative expenses for October
October Total budgeted variable selling and administrative expenses=
(0.6 + 1.2 + 0.3 + 0.35) x 7200 +6000 + 39,000 + 7,200 + 24,000
October Total budgeted variable selling and administrative expenses=2.45x 7200 +6000 + 39,000 + 7,200 + 24,000
October Total budgeted variable selling and administrative expenses=$17,640+6000 + 39,000 + 7,200 + 24,000
October Total budgeted variable selling and administrative expenses=$93,840
Therefore the total budgeted variable selling and administrative expenses for October is $93,840
If foreign manufacturers cut manufacturing costs and profit margins in response to a depreciation in the U.S. dollar, the effect of these actions is to a. lengthen the amount of time in which the depreciation leads to a smaller trade deficit. b. shorten the amount of time in which the depreciation leads to a smaller trade surplus. c. shorten the amount of time in which the depreciation leads to a smaller trade deficit. d. lengthen the amount of time in which the depreciation leads to a smaller trade surplus.
Answer:
a. lengthen the amount of time in which the depreciation leads to a smaller trade deficit.
Explanation:
Depreciation can be defined as the reduction of cost of a fixed asset systematically until the value of the asset becomes zero.
The Modified Accelerated Cost Recovery System (MACRS) can be defined as a depreciation system that avails business owners or companies the ability and opportunity to recover or recoup the cost basis of physical assets that have experienced deterioration over a specific period of time.
In the United States of America, the Modified Accelerated Cost Recovery System (MACRS) is used mainly for tax purposes because it gives room for faster depreciation of a physical asset in its first years or initial usage and reduces depreciation as it is being used over a long period of time.
Hence, if foreign manufacturers cut or reduce their manufacturing costs and profit margins in response to a depreciation in the U.S. dollar, the effect of these actions is certainly to lengthen or increase the amount of time in which the depreciation in the U.S dollars leads to a smaller trade deficit.
A deficit can be defined as an amount by which money, falls short of its expected value.
In Financial accounting, deficit is usually as a result of revenue falling below expenses or expense exceeding revenue at a specific period of time.
For instance, if in a country liabilities exceeds assets or import exceeds export there would be a deficit in the financial account of the country. This is simply as a result of a country having to import more goods and services than it is exporting to other countries in trade.
In conclusion, a trade deficit is caused because the value of goods and services exported is lower than the value of goods and services being imported in a particular country.
