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sammy [17]
2 years ago
10

The direct write-off method: multiple choice follows the expense recognition (matching) principle. Is not permitted under GAAP.

is permitted if results are similar to the allowance method. Is permitted if results are not similar to the allowance method.
Business
1 answer:
Lera25 [3.4K]2 years ago
4 0

Answer: is permitted if results are similar to the allowance method

Explanation:

The direct write-off method is refered to as an accounting method whereby the uncollectible accounts receivable are being written off as bad debt. Here, the bad debts expense account will be debited while the accounts receivable will be credited.

The direct write-off method is permitted if results are similar to the allowance method. For the allowance method, it should be noted that an estimation of the bad debt future amount will be charged to the reserve account once the sale takes place.

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Consider a hypothetical closed economy in which households spend $0.75 of each additional dollar they earn and save the remainin
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Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

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= Spending Multiplier(M)

= 1 ÷ 1 - MPC

= 1 ÷ 1-0.75

= 1 ÷ 0.25

= 4

2). Decrease in government purchases will lead to a decrease in income, generating an initial change in consumption

= -Amount of Government Decrease Purchases by × MPC

= -$250 billion × 0.75

= -$187.5 billion

3). Decrease income again, causing a second change in consumption

= Amount Decrease in Government Purchases × MPC

= -$187.5 billion × 0.75

= $140.6 billion

4).Total change in demand resulting from the initial change in government spending

=  Amount of Government Decrease Purchases by × Spending Multiplier(M)  

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= $1,000 billion

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In the question the graph is missing. Kindly find the attachment for both of question and answer

5 0
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