If you have studied microeconomics, you may recall a concept called "moral hazard". moral hazard occurs when an economic agent is incentivized to take risks because some (or all) of the losses that might result will be borne by other economic agents. how might federal deposit insurance, as administered by the fdic. lead to moral hazard? a. insurance gives bank managers incentives to pursue added risks since losses can be shifted to the fdic. b. insurance may cause bank shareholders to be less vigilant in monitoring the investment strategies of bank managers. c. depositors may pay less attention to the lending practices of banks since their deposits are covered up to some cap. d. all of the above are plausible. e. a and b only.

The revenues of a company increased by 39% in year one and decreased 22% in year two. what is the overall change over the two-year period?

Required prepare the necessary adjusting entries in the general journal as of december 31, assuming the following: on september 1, the company entered into a prepaid equipment maintenance contract. birch company paid $3,400 to cover maintenance service for six months, beginning september 1. the payment was debited to prepaid maintenance. supplies on hand at december 31 are $3,900. unearned commission fees at december 31 are $7,000. commission fees earned but not yet billed at december 31 are $3,500. (note: debit fees receivable.) birch company's lease calls for rent of $1,600 per month payable on the first of each month, plus an annual amount equal to 1% of annual commissions earned. this additional rent is payable on january 10 of the following year. (note: be sure to use the adjusted amount of commissions earned in computing the additional rent.)

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