Answer:
Debit : Bad Debts account : $2000 (appearing in the income statement)
Credit : Provision for doubtful debts account : $2000 (appearing in the balance sheet)
Explanation:
This is an example of provision for doubtful debts. Provision for doubtful debts is an estimated amount of bad debts from accounts receivables that has been issues but not yet collected. This is done under the accrual accounting concept where an expense is identified as soon as invoices have been issued rather than waiting long periods to find out which invoice is irrecoverable. It is typically an estimate based on past experience.
In this question, the sales value has not been provided, hence an assumption is made:
Sales : $200,000
If provision for doubtful debts is 1% of sales and all sales is on credit, then the provision for doubtful debts amount is = 1% x $200,000 = $2000
Provision for doubtful debts is an accounts receivable contra account and thus has a credit balance and is recorded in the balance sheet, listed directly under accounts receivables.
The entry is recorded as:
Debit : Bad Debts account : $2000 (appearing in the income statement)
Credit : Provision for doubtful debts account : $2000 (appearing in the balance sheet)
Answer:
Marketing is the process of getting the right goods or services or ideas to the right people at the right place, time, and price, using the right promotion techniques and utilizing the appropriate people to provide the customer service associated with those goods, services, or ideas.
Explanation:
(hope this helps)
Answer: less than the multiplier effect of a change in government spending.
Explanation:
The multiplier effect of government transfers refers to the measure by which the aggregate demand will increase by as a result of government transfers increasing.
This multiplier is less than the multiplier effect of a change in government spending. This is because government spending affects more people in the economy as it targets both companies and consumers. Government transfers on the other hand, target only welfare and unemployment payments amongst others so it cannot have the same effect as government spending.
