Hazards may increase either the frequency or the severity of losses
Indicate whether the statement is true or false
TRUE
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Niagara Art is a new business
During its first year of operations, credit sales were $41,000 and collections of credit sales were $37,000. One account, $700, was written off. Management uses the percent-of-sales method to account for bad debts expense and estimates 2% of credit sales to be uncollectible. Bad debts expense for the first year of operations is ________. A) $120 B) $820 C) $700 D) $1,560
Mohr Company purchases a machine at the beginning of the year at a cost of $24,000. The machine is depreciated using the straight-line method. The machine's useful life is estimated to be 5 years with a $4,000 salvage value. The book value of the machine at the end of year 2 is:
A. $4,000. B. $20,000. C. $12,000. D. $8,000. E. $16,000.
If the total cost of alternative A is $50,000 and the total cost of alternative B is $34,000, then $16,000 is termed the:
A. differential cost. B. average cost. C. sunk cost. D. out-of-pocket cost. E. opportunity cost.
Alfred Jones received a bank statement that showed a balance of $2,671.13. He noted that there was a $2.50 ATM fee and interest of $1.18. There was an outstanding deposit of $635. His outstanding checks were: Check 214 for $75, Check 217 for $115.89, and Check 218 for $48.19. What is the adjusted bank balance?