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Korvikt [17]
3 years ago
13

The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a balance sheet and which is based

on an estimate of bad debts, is an application of the
Business
1 answer:
Reika [66]3 years ago
3 0

Answer:

The answer is: application of matching principle and contra-asset

Explanation:

The allowance for doubtful accounts is a management estimate of bad debts (amount owed by the customers that is deemed uncollectible). In order to demonstrate the recoverable amount of the accounts receivable, it is usually applied as a reduction in the asset (accounts receivable) by applying contra asset (that is, a way of netting the two accounts).

The estimate of bad debt is in conformity with the matching principle of accounting. The principle states that the revenue generated in a particular accounting period must be matched against the expense for that particular period. In this instance, the the bad debt expense is the expense.

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What is stock exchange?​
Novosadov [1.4K]

A stock exchange is a facility where stock brokers and traders can buy and sell securities such as shares of stock and bonds and other financial instruments

7 0
3 years ago
Read 2 more answers
how all calculations: Palmer Inc. currently produces 110,000 units at a cost of $440,000. Next year Palmer Inc. expects to produ
Mekhanik [1.2K]

Answer:

Will increase to $460,000

Explanation:

Palmer Inc. currently produces 110,000 units at the rate of $440,000

Next year they are expected to produce 115,000 units

Since the cost is variable, the total cost can be calculated as

(440,000/110,000) × 115,000

= 4×115,000

= $460,000

Hence the total cost is $460,000

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3 years ago
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3 years ago
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Santayana Company purchased a machine on January 1, 2011, for $20,000 with an estimated salvage value of $5,000 and an estimated
Aliun [14]

Answer:

$1,125

Explanation:

Given that,

Cost of machine = $20,000

Estimated salvage value = $5,000

Estimated useful life = 8 years

Depreciation refers to the reduction in the value of the fixed assets of a particular company with the passage of time.

Here, we are using the straight line method,

Annual depreciation is as follows:

= (Cost of machine - Salvage value) ÷ Estimated useful years

= ($20,000 - $5,000) ÷ 8

= $1,875

Depreciation amount for the year 2011 = $1,875

Depreciation amount for the year 2012 = $1,875

Therefore, the book value of the machine at the beginning of January 1, 2013 is as follows:

= Cost of machine - Depreciation amount for the year 2011 - Depreciation amount for the year 2012

= $20,000 - $1,875 - $1,875

= $16,250

Now, the Santayana decides the machine will last 12 years from the date of purchase and we have already deduct the depreciation for the 2 years. So, we need to consider only 10 years for calculating the new annual depreciation.

Salvage value remains the same.

New annual depreciation:

= (Book value at the beginning of 2013 - Salvage value) ÷ Useful life

= ($16,250 - $5,000) ÷ 10

= $11,250 ÷ 10

= $1,125

8 0
3 years ago
Which one of the following is NOT a real option? The option to buy shares of stock if its price is expected to increase. The opt
puteri [66]

Answer:

The answer is: The option to buy shares of stock if its price is expected to increase.

Explanation:

A <em>"real option"</em> in management is: a choice managers can take concerning business investment opportunities. <em>Real options</em> usually involve tangible assets (machinery, buildings, inventory, land, etc.) but not financial instruments or stocks.

So the buying or selling of stocks aren´t considered <em>real options</em> in business management.

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3 years ago
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