PART A

On the balance sheet, in accordance with GAAP, items are generally listed at their historical value.

1.) Tell me in what way this limits the the usefulness of the balance sheet to users?

2.) Name an exception to this rule that we learned about when determining the final reporting value of inventory on the balance sheet.

PART B

1.) Define Gross Margin Percentage.

2.) Generally speaking, if a company has high Gross Margin Percentage what does that mean about it's selling price relative to it's COGS.

PART C

1.) Briefly explain the disadvantage of using the direct write-off method for dealing with uncollectable accounts.

2.) Specifically tell me what accounting principle using the direct method violates.

PART D

Where will the allowance for uncollectible accounts be reported in a classified balance sheet?

	A.	In the noncurrent liability section
	B.	In the noncurrent asset section
	C.	In the current asset section
	D.	In the current liability section
	E.	In the equity section