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prohojiy [21]
3 years ago
13

Which of the following accounting strategies (for financial reporting purposes) is the least likely for a firm that is currently

only marginally fulfilling the quantitative measures (all involving earnings) of its debt covenants?
Changing to the successful efforts method of accounting for natural resource exploration costs.
Business
1 answer:
jeyben [28]3 years ago
4 0

Using straight-line depreciation.

Changing to FIFO

Using the weighted average method for capitalizing interest during times of reduced interest rates, rather than the specific method.

Changing to the successful efforts method of accounting for natural resource exploration costs.

Changing to the successful efforts method of accounting for natural resource exploration costs.

<u>Explanation:</u>

The particular technique initially underwrites the enthusiasm on explicit obligation. With financing costs on the decay, enthusiasm on lower rate obligation is promoted and more is expensed, comparative with the weighted normal technique, which underwrites at the normal rate over all obligation.

The weighted normal strategy would underwrite more enthusiasm on more established (higher loan cost) obligation, in this way diminishing the present measure of premium cost and expanding income. Expanding profit lessens the danger of rebelliousness for this firm.

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cumulative discounts

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Sometimes sales representatives could be able to tell lies, steal customers from other coworkers, get customers in an inappropriate way.

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On the other hand, it is necessary to consider the possible problems of deception and greed that could be presented among the fellow sales representatives. In my opinion, this should be an activity that needs to be monitored very closely in order to be highly beneficial for the group in general.

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