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2 years ago

How does an increase in bad debt affect a sole trader financial statement

Business

1 answer:

Kamila [148]2 years ago

7 0

Answer:

It will increase expense, thereby reducing the profit mentioned in the income statement and decrease the current asset (debtor) recorded in the balance sheet.

Explanation:

Bad Debt is an expense that is recorded when it is expected that the customer, who owes a debt to the business, might default in clearing their dues.

As such when the bad debt amount is increased it will result in a rise in expense and therefore the profit, as stated in the profit and loss (income statement) of the sole trader would decrease.

Moreover, it will also decrease the value of trade receivables (current assets) mentioned in the balance sheet. The following entry would be recorded:

Bad Debts (Dr) xxxxx

Trade Receivables (Cr) xxxxxx

Hence, the expenses will increase while the current asset will decrease.

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The fundamental attribution error:______ a. advantages non-dominant group members while disadvantaging dominant group members. b

guapka [62]

Answer:

Option B

Explanation:

In simple words, The fundamental mistake throughout the attribution refers to the propensity for individuals to overemphasise personal attributes and neglect environmental variables in evaluating actions of others.

For instance, in one experiment whenever something unpleasant occurred to somebody else, participants blamed the actions or attitude of that individual 65 per cent of the total times. Thus, from the above we can conclude that the correct option is B.

3 0

2 years ago

"You need to have $15,000 in five years to pay off a home equity loan. You can invest in an account that pays 5.75 percent compo

Nana76 [90]

Answer:

I have to invest $11364.

Explanation:

The formula of Compound Interest is:

$A = P(1+\frac{r}{n})^{nt}$

where A = Amount

P = Principle

r = rate

n = Number of Compounding per year

t = total number of year

Here, A = 15000, r = 5.75% = 0.0575, n = 4(quarterly), and t = 5.

Putting all these values in above formula:

$15000 = P(1+\frac{0.0575}{4})^{4\times5}$

⇒ $15000 = P(\frac{4.0575}{4})^{20}$

⇒ $15000 = P(1.014)^{20}$

⇒ $15000 = P(1.320)}$

⇒ P = 11364

Hence, I have to invest $11364 for 5 years.

4 0

3 years ago

what do people mean when they say that it is better to balance the economy than to balance the budget?

hammer [34]

I guess because the economy falling apart and the budget keeps going up.

7 0

3 years ago

Wireless communications is likely to be viewed as an essential part of an enterprise network infrastructure when:

erica [24]

Wireless communications is likely to be viewed as an essential part of an enterprise network infrastructure when communication must take place in a difficult terrain where wired communication is difficult or impossible to build.

4 0

3 years ago

Ivanhoe Company issued $1520000 of 6%, 5-year bonds at 95, which pay interest annually. Assuming straight-line amortization, wha

Mashutka [201]

Answer:

the journal entry to record bond issuance:

Dr Cash 1,444,000

Dr Discount on bonds payable 76,000

Cr Bonds payable 1,520,000

amortization of discount on bonds payable = $76,000 / 5 = $15,000

coupon payment = $91,200

total interest expense per year = $106,200

total interest expense for the 5 year period = $106,200 x 5 years = <u>$531,000</u>

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6 0

2 years ago