Why does the direct write-off method of accounting for bad debts usually fail to match revenues and

Question:

Why does the direct write-off method of accounting for bad debts usually fail to match revenues and expenses? Discuss.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting Information for Decisions

ISBN: 978-0078025891

7th edition

Authors: John Wild

See More Books

Question Posted: Sep 19, 2017 09:46 AM

See More Questions

Adria Lopez, owner of Success Systems, realizes that she needs to begin accounting for bad debts expense. Assume that Success Systems has total revenues of $ 43,853 during the first three months of...
Paulines Pottery has always used the direct write- off method to account for uncollectibles. The companys revenues, bad debt write- offs, and year- end receivables for the most recent year follow:...
DejaVu Company has been in business for several years and has the following information for its operations in the current year: Total credit sales..$3,000,000 Bad debts written off in the year 60,000...
Selected financial data for Amberjack Corporation follows. Year 1 ($ thousands) Year 2 ($ thousands) Sales 273,161 460,445 Cost of goods sold 251,191 343,244 Net income (157,044) (403,709) Cash flow...
Simonies Company, which uses iGAAP, has a note receivable with a carrying value of $30,000 at December 31, 2010. On January 2, 2011, the borrower declares bankruptcy, and Simonis estimates that only...
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $84,000 cash. On October 31, the companys records show the following items and amounts....
PR 16-1 What defines a business as a partnership? What factors need to be examined to determine if an individual is a partner, and not some other type of participant in the business?
Suppose you manage Outward Bound, Inc., a Vermont sporting goods store that lost money during the past year. To turn the business around, you must analyze the company and industry data for the...
Budgeted Income Statement and Supporting Budgets The budget director of Feathered Friends Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered...
2. Leases and taxes Aa Aa Leasing is a very lucrative source of financing for certain companies' needs, including corporations and small- to medium-sized businesses. This is because the Internal...
Refer to the December 31, 2012, financial statements of Samsung in Appendix A. Does Samsung report its accounts receivable as current or noncurrent asset? Does Samsung report its accounts receivable...
Refer to the financial statements and notes of Apple in Appendix A. In its presentation of accounts receivable on the balance sheet, how does it title accounts receivable? What does it report for its...
The financial statements of Lioi Steel Fabricators are shown below, both the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6% rate after 2011. The...
Coaching for Performance Develop a strategy for how you will approach the coaching session with the employee, including what you plan to discuss and any questions you may have when you debrief....
For the following exercises, find the derivatives of the given functions: 1. y=x-secx+1 2. y = 3 cscx+ 5 3. f(x) = x cotx 4. f(x) = secx I 5. y=
1. why does Amazon use ERP system? How does ERP system work for Amazon? what are the benefit and drawbacks of using ERP for Amazon? 2. what are 5 industry best practices across Finance,...
A rigid vessel contains afuel gasconsisting of a methane (CH4) and ethane (C2H6) mixture. The pressure in the vessel is found to be 0.30 bar.Air is added to the vessel until the total pressure...
Do you agree with this discussion post? My article discusses decision-making tools in Project Management (PM). "In research and development (R&D), project management (PM) decision-making tools are...
The differential equation y'' + (sgn x)y = 0 (25) has the discontinuous coefficient function Show that Eq. (25) nevertheless has two linearly independent solutions y 1 (x) and y 2 (x) defined for all...
Give an example of transitory income. What effect does this income have on the marginal propensity to consume?
Assume that you tour Apples factory where it makes its products. List three direct costs and three indirect costs that you are likely to see.
Should we evaluate a managers performance on the basis of controllable or noncontrollable costs? Why?
Explain why knowledge of cost behavior is useful in product performance evaluation.
In 2019, Sunland Company had a break-even point of $388,000 based on a selling price of $5 per unit and fixed costs of $155,200. In 2020, the selling price and the variable costs per unit did not...
11. String Conversion Given a binary string consisting of characters '0's and '1', the following operation can be performed it: Choose two adjacent characters, and replace both the characters with...
Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table. Callaway Golf (ELY) Alaska Air Group (ALK) Yum! Brands (YUM) Caterpillar...

Why does the direct write-off method of accounting for bad debts usually fail to match revenues and

Question:

Step by Step Answer:

Revenues and expenses usually are not matched under the direct wri...View the full answer

Financial Accounting Information for Decisions

Students also viewed these Cost Accounting questions