Answer: The statement "A. Relevant information is complete, neutral, and free from error." is incorrect
Explanation: The generally accepted accounting principles are a set of rules and norms that serve as an accounting guide to formulate criteria related to the measurement of equity and to the information of the patrimonial and economic elements of an entity. While one of these 14 principles speaks of neutrality in none mentions that Relevant information is complete, neutral, and free from error
Answer: The decision will directly impact many agencies, individuals, or community members.
Explanation: Because the leader has enough expertise to make a good decision.
Answer:
If the company used the percentage of sale method and estimates bad debts to be 2% of sales what is the amount of bad debt expense:
If the company uses the percentage of accounts receivable method and estimates 4% of accounts receivable will be uncollectible
Explanation:
- The percentage of sale method
800,000 2% 16,000
Initial Balance
Accounts Receivable $ 120,000
Allowance for Uncollectible Accounts $ 500
Allowance for Uncollectible Accounts $ 15,500
Accounts Receivable $ 15,500
- Accounts Receivable Method 4% 4,800
Bad debt expense $ 4,300
Allowance for Uncollectible Accounts $ 4,300
Answer:
d. It is best measured using the statistic variance inflation factor (VIF).
Explanation:
Multicollinearity is an important issue in multiple regression model, having many independent/ explanatory variables. Multicollinearity is the situation in which two or more independent variables are highly correlated. It is problematic because it increases the standard error of independent variable coefficient & undermines its statistical significance
Variance Inflation Factor [VIF] is a check & corrective measure of multicollinearity.
- VIF as a multicollinearity check : It quantifies the correlation between one explanatory variable with other explanatory variables.VIF = 1 implies there is no multicollinearity (correlation between independent variables); VIF upto 5 implies there is moderate multicollinearity (correlation between independent variables). VIF > 5 implies high multicollinearity (correlation between independent variables)
- VIF as a multicollinearity correction : Calculating
= σ^2 / ![[TSS j (1 - R^2j)]](https://tex.z-dn.net/?f=%5BTSS%20j%20%281%20-%20R%5E2j%29%5D)
; where TSS = total sum of square of variable j , σ^2 = j variance, R^2 j = R^2 from regressing all other independent variable on variable j
