I need some assistance with these assignment. accounting management take-home exam (relatively easy) Thank you in advance for the help!

I need some assistance with these assignment. accounting management take-home exam (relatively easy) Thank you in advance for the help! Branding, investing heavy amounts in R&D or patents, lowering cost substantially by achieving economies of scale, restricting the supply of materials, high customer loyalty and legal barriers are some of the barriers to entry that a company can erect in order to defend against the threat of new entrants.

Increasing the switching the costs of the customer so that the existing customers do not buy the substitute product can help in defending the threat of substitutes. The strategy of differentiation can also help in mitigating the threat of substitutes as effective differentiation leads to customer loyalty and a loyal customer will not shift to a substitute product For example, MacBook’s customers are very loyal to the brand and do not switch to substitute products due to the effective differentiation strategy implemented by Apple. The relative price and performance can also help in mitigating the threat of substitute. If a product provides superior performance at a very low cost as compared to competitors, consumers would prefer that product.

Depreciation is a noncash expense that provides for the physical wear and tear of the fixed asset in future. The depreciation rate or method that a company applies is highly subjective and a company is free to choose a particular depreciation method to record depreciation on fixed assets. If a company uses low depreciation rate or uses a straight-line depreciation method, it can result in lower depreciation expense and thus overstated assets. Difficulties in estimating the amount of future commitments (such as guarantees) can result in understatement of liabilities. Furthermore, not recording a liability such as a loan payable may also understate the liabilities.

Management usually engages in these types of choices to show an inflated income in the income statement or to show a healthy financial position of the company.