Define legal and contractual feasibility. Describe activities that may be involved in this feasibility study
What will be an ideal response?
Legal and contractual feasibility is the process of assessing potential legal and contractual ramifications due to the construction of a system. Possible considerations might include copyright or nondisclosure infringements, labor laws, antitrust legislation, foreign trade regulations, and financial reporting standards, as well as current or pending contractual obligations. Contractual obligations may involve ownership of software used in joint ventures, license agreements for use of hardware or software, nondisclosure agreements with partners, or elements of a labor agreement. A common situation is that development of a new application system for use on new computers may require new or expanded, and more costly, system software licenses.
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The statement of cash flows reflects the revenues actually earned by the business, regardless of whether cash has been collected
a. True b. False Indicate whether the statement is true or false
Because failure to record a liability generally leads to failure to record an expense, it usually results in an overstatement of income
Indicate whether the statement is true or false
How is the average number of days to collect accounts receivable computed?
A. Accounts Receivable ÷ Net income B. Accounts Receivable ÷ 365 C. 365 ÷ Accounts receivable turnover ratio D. Sales ÷ Net accounts receivable
At the beginning of 2017, Smoothie Town, Inc has the following account balances
Accounts receivable $44,000 (Debit) Allowance for Bad Debts $7,000 (Credit) During the year, credit sales were $820,000. Cash collected on credit sales was $750,000, and $18,000 was written off. Smoothie Town uses the aging-of-receivables method to record bad debts expense. The amount estimated as uncollectible was $26,000. The amount of Bad Debts Expense for 2017 is ________. A) $37,000 B) $26,000 C) $11,000 D) $8,000