Which of the following statements is true regarding the two allowance methods used to account for bad debts?
a. The percentage of net credit sales approach takes into account the existing balance in the Allowance for Doubtful Accounts account.
b. The direct write-off method takes into account the existing balance in the Allowance for Doubtful Accounts account.
c. The percentage of accounts receivable approach takes into account the existing balance in the Allowance for Doubtful Accounts account.
d. The direct write-off method does a better job of matching revenues and expenses.
c
You might also like to view...
Christine’s purse manufacturing company has made substantial profit over the past decade. For the first few years, she reinvested all of the profit back in the business, but now she feels it is time to channel her profits toward community endeavors. She is opening a store in a rough part of town and donating money to the city to help revitalize the district. Christine is operating at what level of corporate social responsibility?
A. economic B. legal C. ethical D. discretionary
Equipment with a cost of $130,000 has an estimated residual value of $10,000 and an estimated life of 5 years or 12,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours?
A) $24,000 B) $32,500 C) $33,000 D) $35,750
Unlike other forms of promotion, ________ is not usually perceived as being sponsored by the company, especially in negative instances.
A. publicity B. direct marketing C. transit advertising D. outdoor advertising E. trade promotion
Which of the following statements regarding vertical integration is FALSE?
A) Vertically integrated companies may be large, but unlike other large corporations, since they remain focused in one industry they are easy to run. B) A company might not be happy with how its products are being distributed, so it might decide to take control of its distribution channels. C) A company might conclude that it can enhance its product if it has direct control of the inputs required to make the product. D) The principal benefit of vertical integration is coordination. By putting two companies under central control, management can ensure that both companies work toward a common goal.