An advantage of basing bad debt expense on the historical relationship between bad debts and net credit sales is that
A) it provides the best estimate of the net realizable value of accounts receivable.
B) it provides the best information to the credit department to use in its collection activities.
C) it best adheres to principle of cause and effect recognition.
D) it considers the balance in the allowance account when making the bad debt expense estimate.
C
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If a seller offers a written ________ warranty, the consumer transaction is subject to the Magnuson-Moss Act.
Fill in the blank(s) with the appropriate word(s).
Division Y has asked Division X of the same company to supply it with 7600 units of part L763 this year to use in one of its products. Division Y has received a bid from an outside supplier for the parts at a price of $46.00 per unit. Division X has the capacity to produce 30,400 units of part L763 per year. Division X expects to sell 27,360 units of part L763 to outside customers this year at a price of $49.60 per unit. To fill the order from Division Y, Division X would have to cut back its sales to outside customers. Division X produces part L763 at a variable cost of $38 per unit. The cost of packing and shipping the parts for outside customers is $2 per unit. These packing and shipping costs would not have to be incurred on sales of the parts to Division Y.Required:a. What is the
range of transfer prices within which both the Divisions' profits would increase as a result of agreeing to the transfer of 7600 parts this year from Division X to Division Y? (Round your final answers to 2 decimal places.)Range of transfer prices?< Transfer price < ?b. Is it in the best interests of the overall company for this transfer to take place? A. No B. Yes
Discounting a note receivable
a. Requires using an account called discount on notes receivable b. Is the process of lending money c. Slows the collection process d. Is the process of selling a promissory note
Review the following diagram. Which answer provides the best interpretation of the multiplicities for the association between the Product Categories and Supplier Categories classes?
A. Every supplier and product category can be managed by several partners, but no partner manages both. B. Each partner can only purchase products from one supplier category and for one product category. C. Supplier and product category information can be used to calculate year-to-date sales for each product/supplier category combination. D. Some partners may manage several product categories, and some partners may manage several supplier categories, but there is no direct link between supplier and product categories.