Answer:
True
Explanation:
Since it is given in the question that the $95,000 amount is borrowed from the local bank against the purchase its first year's inventory and the same is to be repaid before the end of its fiscal year.
So if the payment is made within the one year the same is to be classified as current assets and is to be reported on the balance sheet
Answer: $4,811
Explanation:
Assuming 6% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible that would be,
= 6% * 98,700
= $5,922
The Allowance for Doubtful Accounts acts as a buffer for the business when bad debts are incurred.
Bad debts are taken from the Allowance as the Allowance has already been removed from the Receivables.
In cases where Bad debts exceed the buffer in the Allowance for Doubtful Debt Account we take everything in it and the remaining bad debt amount is debited to Bad Debt expense.
That would be,
= 5,922 - 1,111
= $4,811
$4,811 is the amount that should be debited to Bad Debts Expense.
Answer:
The credit manager, and the Controller
Explanation:
The credit manager is responsible for maintaining the credit policy, in order to fulfil this target they are responsible to look at the sales and ensure the credit sales are in the sales limit.
Further that the company do not have the bad debts, it shall verify each customer properly that they have enough funds, and ensure their credibility.
Controller is responsible for maintaining the financial records of accounts, and reporting the transactions to managers.
Accordingly, Credit manager along with controller are directly responsible to the vice president of finance.
Answer:
False
Explanation:
In the initial period, the prepaid expenses should be recorded in the assets hand side of the balance sheet under the current asset column
But when some adjustments are made regarding this in terms of gains or expenses incurred, the same should be presented on the income statement
Hence, the given statement is false as it is recorded in the assets only during the initial period
