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iren [92.7K]
3 years ago
8

Mega Loan Company has very stringent credit requirements and, accordingly, has negligible losses from uncollectible accounts. Th

e company's independent accountants did not protest when, contrary to GAAP, the company recorded bad debt expense only when specific accounts were determined to be uncollectible, rather than use an allowance for uncollectible accounts.
The concept demonstrated is:(A) Materiality. Correct(B) Cost-effectiveness.(C) Faithful representation.(D) Comparability.
Business
1 answer:
AfilCa [17]3 years ago
6 0

Answer: The correct answer is "(A) Materiality.".

Explanation: The concept demonstrated is Materiality because by having a mechanism for preventing bad accounts through their strict requirements, they only recorded bad accounts when they actually existed, instead of making a provision.

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The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports
blagie [28]

Answer:

The correct option is b. $8,100

Explanation:

Since the question was asked about the allocation of maintenance department expense to assembly and the maintenance department expense is based on the square footage.

So, the following equation should be used which is shown below:

= Maintenance department expense × assembly square foot space ÷ total sum of square foot space

where,

Maintenance department expense is $18,000

Assembly square footage is 2,700

And, the total sum of square foot space equals to

=  Fabrication square foot space + assembly square foot space

= 3,300 + 2,700

= 6,000

Now, put these values on the above equation.

So, the value would be equals to

= $18,000 × 2,700 ÷ 6,000

= $18,000 × 0.45

= $8,100

The other cost is irrelevant. Thus, it is ignored while computation.

Hence, the amount of Maintenance department expense to be allocated to Assembly is $8,100

Therefore, the correct option is b. $8,100

7 0
3 years ago
If a group of farmers who grow oranges helps fund a university-based research project to determine the amount of vitamin c conta
True [87]
To oranges juice that's what it's going to turn too
5 0
3 years ago
On December 31, 2019 a company’s Accounts Receivable balance was $440,000. During the year the company recorded credit sales of
Semenov [28]

Answer: Option C - Assets are Overstated; No effects on liabilities: Equity is Overstated

Explanation:

When Bad debts are recorded, they will reduce the Accounts Receivable account because less money will be expected from debtors. Accounts Receivable is an asset account so it will be Overstated if bad debts are not recorded.

Equity will also be overstated because bad debts is an expense that is sent to the Income statement. If this expense is not deducted, the net income will be larger than it should be and when added to Equity it will overstate it.

6 0
3 years ago
Street Runner Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs a
KiRa [710]

Answer:

$8.20/Direct Labor hours

Explanation:

Cost of performing engine repair work = Shop and repair equipment depreciation + Shop supervisor salaries + Shop property taxes + Shop supplies

Cost of performing engine repair work = $40,000 + $133,000  + $22,000 + $10,000

Cost of performing engine repair work = $205,000

Direct Labor Hours = Direct Labor/Direct Labor rate

Direct Labor Hours = 500,000/$20 per hour

Direct Labor Hours = 25,000 hours

Predetermined shop overhead rate per direct labor hour = $205,000 / 25,000 Hours = $8.20/Direct Labor hours

5 0
3 years ago
Which of the following statements is true? Select one: A. Breastfed babies are less likely to develop allergies than babies who
ra1l [238]

Answer:

The correct answer is letter "A": Breastfed babies are less likely to develop allergies than babies who are fed infant formula.

Explanation:

Breastfeeding a baby after labor and the following months is crucial for the baby's future health status. Studies reveal that infants tend to develop more health conditions such as <em>allergies, asthma </em>or<em> overweight</em> when they are given formula instead of breastfeeding. The harm is not only from the baby's side but also from the mother's. <em>Ovarian cancer, diabetes, </em>and <em>cardiovascular diseases</em> are caused by not nursing babies.

7 0
3 years ago
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