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marta [7]
3 years ago
14

Which of the following statements is true?

Business
2 answers:
mixas84 [53]3 years ago
8 0

Answer:

The correct answer is B: direct write-off method

Explanation:

Unfortunately, some sales on account may not be collected. Customers go broke, become unhappy and refuse to pay, or may generally lack the ethics to complete their half of the bargain. It is necessary to establish an accounting process for measuring and reporting these uncollectible items. Uncollectible accounts are frequently called “bad debts.”

There are two methods of accounting to manage uncollectable accounts:

1- Allowance method

2- Direct Write-off Method

2- Under this method, there is no allowance account. An account receivable is written-off directly to expense only after the account is determined to be uncollectible. This method is required for income tax purposes. The direct write-off method is easy to operate as it only requires that specific debts are written off as they are identified with a simple journal. The problem with the method, however, is that it does not comply with the matching principle, in that revenue might be recorded in one period, when the customer is invoiced, whereas the expense of writing off the uncollectible amount is recorded in a completely different period when the amount is identified as irrecoverable.

marissa [1.9K]3 years ago
5 0

Answer: B) A)

Explanation:

  •   This kind of method, direct write-off method is referring to your question and it is considering a method that is used for recognizing bad debts expenses that are coming from credit sales of someone's account. With this method there is no account that is considering allowance and receivable that is found on someones's account is written-off directly to expense when there is uncollectible account expense.
  •   One of the greatest advantages is simplicity because those companies who are doing this method have to make only two transactions.

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Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.
sweet [91]

Answer:

The intrinsic value of the stock is 9.76

Explanation:

We have to use the dividend growth model

It is fundamental to understand that these values are in the future so we must take them to present value, using the required return of 14%

\left[\begin{array}{ccc}-&DIVIDENDS&PRESENT VALUE\\1&0&0\\2&0&0\\3&0.75&0.506228637151512\\4&0.87&0.515109841312065\\5&1.0092&8.73578093453209\\Intrinsic&Value&9.75711941299567\\\end{array}\right]

We multiply year 3 by 1.16 to get year 4

Then we multiply year 4 by 1.16 to get year 5 dividends.

Then we use the dividend growth model to get the value ofthe future years

\frac{dividends}{return-growth} = intrinsic \: value

Again, this value is set 5 years into the future, so we have to calculate the present value

\frac{intrinsic \: value}{1.14^{5} } = Present Value

Same process is done for year 3 and 4

\frac{.75}{1.14^{3} } = PV \: Year3

\frac{.87}{1.14^{4} } = PV \: Year4

Then we add the three values to get the value of the stock today.

5 0
3 years ago
The national organization for women (now), the american civil liberties union (aclu), and the national right to life committee a
sashaice [31]

The national organization for women (now), the American civil liberties union (ACLU), and the national right to life committee are all examples of special interest groups.

A special interest group (SIG) is a community within a larger organization that has a common goal of advancing a particular field of knowledge, learning, or technology.

Members work together to influence or produce solutions in their particular field and may communicate, gather in person, and plan conferences.

These interest organizations speak for groups that advocate for and support vulnerable communities. The Sierra Club, for instance, focuses on preserving both the environment and the world's wild places.

They also emphasize educating individuals about environmental protection. These kinds of organizations promote their particular interests and build a foundation of support that helps them advance their public issue.

To learn more about special interest groups refer to:

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4 0
1 year ago
the stock price jumps twice in a given year. if it jump up, it goes up by 10%, if it goes down, it goes down by 20%. the stock i
cestrela7 [59]

The value of European Put option is 9.

<h3>What is Put option?</h3>

Under derivative securities market an option whose value depend on the underlying item where delivery is not made generally & net settlement done by squaring off the position and depends on the volatility of market.

Put Option is a bearish school of thought where investor thinks the market will decline & the value will be below the exercise price.

In hedging the position of investor make certain not better, therefore the value of put option lies between zero or difference value among the spot price & exercise price with discounting annual market interest rate:

Spot = 70

Exercise = 65

Future Price = 70 × 80% = 56

Rate = 4 % Compounded semi annually.

Value of Put = Spot Price - Exercise Price

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                     = 9  

Thus the value of put option will be 9 (65-56).

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6 0
1 year ago
A law firm received $2,000 cash for legal services to be rendered in the future. The full amount was credited to the liability a
Elodia [21]

Answer:  d. revenues to be understated.

If the services have been rendered but the revenue is not recorded it means that your accounts will show less revenue than you have actually earned as in accounting revenue is recognized as soon as the service is rendered, thus not recognizing the revenue when the service is rendered will understate the revenues.

Explanation:

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3 years ago
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dlinn [17]

Answer and Explanation:

The tax consequences for the following events -

a. The organization should record the amount of $10,000 in the year 2018 as they followed the cash basis and the cheque should be equal to the cash also troy could not able to record the bonus till it is actually collected

b. As per the accrual basis, the income should be recorded when they are earned not when they are received so the corporation should record the income in the year 2018 as the agent performed the service

c. Since the restrictions that are imposed on cheque for payment purpose should be treated as the substantial and the cheque should not be equivalent to the cash because the customer told that check should be held till Jan 2019 so the income should not be recorded in 2018

7 0
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