Question
The sales returns and allowances account is: a. a contra-asset account b. a contra-revenue account c. on the balance sheet d. on the statement of
The sales returns and allowances account is:
a. a contra-asset account
b. a contra-revenue account
c. on the balance sheet
d. on the statement of shareholders' equity
Which one of the following explanations for the growth of accounts receivable outstripping the growth of sales presents a red flag?
a. The firm adopts new credit terms that lenghten the payment terms to the industry average
b. The firm adopts an aggressive revenue recognition policy
c. The firm develops an attractive credit policy for first time buyers
d. The firm changes its timing of revenue recognition to a more conservative approach
When a firm does not adopt the fair value option, it:
a. need not disclose the fair value of its long-term notes receivable
b. still must disclose the fair value of its long-term notes receivable unless the reported value approximates fair value
c. still must disclose the fair value of its long-term notes receivable if the reported value exceeds fair value
d. may disclose the fair value of its long-term notes receivable if the reported value exceeds fair value, but such disclosure is not required
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