Indicate whether the following are TRUE or FALSE. . The matching principle permits the use of the direct write-off...
Indicate whether the following are TRUE or FALSE.
|
. |
The matching principle permits the use of the direct write-off method of accounting for uncollectible accounts when bad debts are very large in relation to a company's other financial statement items such as sales and net income. |
|
_____ |
Deferred income is an example of a revenue account that increases equity. |
|
_____. |
A credit memo on a bank statement is an example of a timing difference. |
|
_____. |
Federal laws prohibit the selling of accounts receivables to factors. |
Homework Answers
- The given statement is false because as per the matching principle expenses and revenues of the current year must be shown in the same period, but under direct-write off method, bad debt is written off in the period it was declared as uncollectible. Thus, direct-write off method is against matching principle.
- The given statement is false as deferred income is an example of unearned revenue account and it increases liability.
- The given statement is false as credit memo is a note sent by the bank to inform the increase in bank balance of the account holder.
- The given statement is false because Federal laws does not prohibit the selling of accounts receivables to the factor.
Add Answer to:
Indicate whether the following are TRUE or FALSE. . The matching principle permits the use of the direct write-off...
) Indicate whether the following are TRUE or FALSE. 1. A company had net sales...
) Indicate whether the following are TRUE or FALSE. 1. A company had net sales of $545,000 and cost of goods sold of $345,000. Its gross margin equals $890,000. 2. An accelerated depreciation method creates a larger depreciation charge as the asset comes closer to the end of its useful life. 3. Units of Production is an accelerated depreciation method. _____ 4. The term “depletion” as applied to intangible assets follows the matching principle. _____5. Even if the end...
Ture or fause question UI TALSE. A company had net sales of $545,000 and cost of goods sold of S345,000. Its gross 1...
Ture or fause question
UI TALSE. A company had net sales of $545,000 and cost of goods sold of S345,000. Its gross 1. margin equals $890,000 An accelerated depreciation method creates a larger depreciation charge as the asset comes closer to the end of its useful life. 3. JUnits of Production is an accelerated depreciation method. __4. The term "depletion" as applied to intangible assets follows the matching principle. Even if the end of an accounting period occurs between the...
6. An estimated liability is a POSSIBLE obligation if a certain event occurs. The estimated realizable...
6. An estimated liability is a POSSIBLE obligation if a certain event occurs. The estimated realizable accounts receivable is what the company anticipates that it will collect The term 'capitalizing a cost' means charging it to stockholder's equity. _8. 19. The working capital (current) ratio is an indicator of a company's liquidity. 10. 12. 13. Accounts Receivable is an example of an intangible asset. Merchandise Inventory would be debited when goods are purchased by a company that uses a periodic...
Cut write-off method of accounting for uncollectible receivables is! A. an example of the balance sheet...
Cut write-off method of accounting for uncollectible receivables is! A. an example of the balance sheet approach. B. an example of the income statement approach. C. not in conformity with GAAP. D. in conformity with the matching principle. 17. Gorp Corp. uses the percentage-of-sales method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts has a credit balance of $1,500. During the year Gorp Corp. writes off uncollectible receivables of $1,200. At the end...
Which one of the following is not an accurate statement regarding the direct write-off method of...
Which one of the following is not an accurate statement regarding the direct write-off method of accounting for bad debts? a. The allowance method for bad debts violates the matching principle, but the direct write-off method does not. b. Under the direct write-off method, an expense is increased c. The direct write-off method ignores the possibility that partial collection of a company's outstanding accounts receivable may occur d. The direct write off method has some deficiencies when accounting for bad...
Questions: I) The percentage of completion method is an application of the matching principle: True or...
Questions: I) The percentage of completion method is an application of the matching principle: True or False? II) On which financial statement at what amount are account receivable reported? a) Balance sheet at the amount owed by customers b) Income statement at the net uncollectible amount c) Income statement at the amount written off d) Balance sheet at the net realizable value III) Under the allowance method of recognizing uncollectible accounts, the entry to write off an uncollectible account: a)...
When is it acceptable to use the direct write-off method to account for uncollectible accounts? O...
When is it acceptable to use the direct write-off method to account for uncollectible accounts? O When the expected bad debts are not significant O When the company pledges its accounts receivables O When the expected bad debts are significant O It is never acceptable to use the direct write-off method under GAAP O When the company sells its accounts receivables The advantage of FIFO is that it assigns the most recent costs to cost of goods sold, and better...
True/False Indicate whether the statement is true or false, 1. Receivables from company owners and officers...
True/False Indicate whether the statement is true or false, 1. Receivables from company owners and officers should be disclosed separately on the balance sheet. 2. Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables. 3. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use. 4. During construction of a building, the cost of interest...
QS 7-4 Distinguishing between allowance method and direct write-off method LO P1, P2 Indicate whether each...
QS 7-4 Distinguishing between allowance method and direct write-off method LO P1, P2 Indicate whether each statement best describes the allowance method or the direct write-off method. List Method 1. Estimates bad debts expense related to the sales recorded in that period. 2. Matches the estimated loss from uncollectible accounts receivable against the sales they helped create. Usually does not best match sales and expenses because bad debts expense is not recorded until an account becomes uncollectible, which usually occurs...
Saved The following list describes aspects of either the allowance method or the direct write-offf method to acco...
Saved The following list describes aspects of either the allowance method or the direct write-offf method to account for bad debts. For each item listed, indicate if the statement best describes either the allowance method or the direct write-off method. List Method 1 May be used when bad debts expense is very small in relation to a company's sales and net income. 2 The write-off of a specific account does affect net income The loss from an uncollectible account receivable...
Ture or fause question
UI TALSE. A company had net sales of $545,000 and cost of goods sold of S345,000. Its gross 1. margin equals $890,000 An accelerated depreciation method creates a larger depreciation charge as the asset comes closer to the end of its useful life. 3. JUnits of Production is an accelerated depreciation method. __4. The term "depletion" as applied to intangible assets follows the matching principle. Even if the end of an accounting period occurs between the...
6. An estimated liability is a POSSIBLE obligation if a certain event occurs. The estimated realizable accounts receivable is what the company anticipates that it will collect The term 'capitalizing a cost' means charging it to stockholder's equity. _8. 19. The working capital (current) ratio is an indicator of a company's liquidity. 10. 12. 13. Accounts Receivable is an example of an intangible asset. Merchandise Inventory would be debited when goods are purchased by a company that uses a periodic...
Cut write-off method of accounting for uncollectible receivables is! A. an example of the balance sheet approach. B. an example of the income statement approach. C. not in conformity with GAAP. D. in conformity with the matching principle. 17. Gorp Corp. uses the percentage-of-sales method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts has a credit balance of $1,500. During the year Gorp Corp. writes off uncollectible receivables of $1,200. At the end...
Which one of the following is not an accurate statement regarding the direct write-off method of accounting for bad debts? a. The allowance method for bad debts violates the matching principle, but the direct write-off method does not. b. Under the direct write-off method, an expense is increased c. The direct write-off method ignores the possibility that partial collection of a company's outstanding accounts receivable may occur d. The direct write off method has some deficiencies when accounting for bad...
When is it acceptable to use the direct write-off method to account for uncollectible accounts? O When the expected bad debts are not significant O When the company pledges its accounts receivables O When the expected bad debts are significant O It is never acceptable to use the direct write-off method under GAAP O When the company sells its accounts receivables The advantage of FIFO is that it assigns the most recent costs to cost of goods sold, and better...
True/False Indicate whether the statement is true or false, 1. Receivables from company owners and officers should be disclosed separately on the balance sheet. 2. Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables. 3. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use. 4. During construction of a building, the cost of interest...
QS 7-4 Distinguishing between allowance method and direct write-off method LO P1, P2 Indicate whether each statement best describes the allowance method or the direct write-off method. List Method 1. Estimates bad debts expense related to the sales recorded in that period. 2. Matches the estimated loss from uncollectible accounts receivable against the sales they helped create. Usually does not best match sales and expenses because bad debts expense is not recorded until an account becomes uncollectible, which usually occurs...
Saved The following list describes aspects of either the allowance method or the direct write-offf method to account for bad debts. For each item listed, indicate if the statement best describes either the allowance method or the direct write-off method. List Method 1 May be used when bad debts expense is very small in relation to a company's sales and net income. 2 The write-off of a specific account does affect net income The loss from an uncollectible account receivable...
Most questions answered within 3 hours.
-
A college student is employed as a door-to-door newspaper
salesman. Historical data suggests that the student...
asked 3 minutes ago -
Considering gravitational time dilation, calculate the time that
passes in Earth’s surface while 1 hour passes...
asked 27 minutes ago -
Minitab Problem: Take the Lake Hume June rainfall data and find
use the processes outlined in...
asked 1 hour ago -
X Company is trying to decide whether to continue using old
equipment to make Product A...
asked 1 hour ago -
IN PYTHON ONLY !! Program 2: Re-work
program #5 (WeeklyHours) from the previous assignment such that...
asked 1 hour ago -
The average length of time between arrivals at a turnpike
toll-booth is 26 seconds. What is...
asked 3 hours ago -
(a) A piston at 6.1 atm contains a gas that occupies a volume of
3.5 L....
asked 4 hours ago -
Please answer true or false. Words
cannot be changed or added in to make it true...
asked 4 hours ago -
An empty test tube weighs 15.923 grams. Then,
MgCl2•6H2O is added into the test tube. After...
asked 4 hours ago -
Assume memory access is 10 units of time and disk access is
10000 units of time....
asked 5 hours ago -
1. Are all good samples random?
2. Magazines often report surveys giving statistics such as “63%...
asked 5 hours ago -
Under all the various types of market structures, firms
must eventually earn some economic profits for...
asked 5 hours ago