« previous next »

Author Question: Discuss the importance of reporting net accounts receivable. What will be an ideal ... (Read 56 times)

dakota nelson

  • Hero Member
  • *****
  • Posts: 604
on: Jul 5, 2018
Discuss the importance of reporting net accounts receivable.
 
  What will be an ideal response?

Question 2

Stevens Company started the year with an inventory cost of 145,000 . During the month of January, Stevenspurchased inventory that cost 53,000 . January sales totaled 140,000 . Estimated gross profit is 35. Theestimated ending inventory as of January 31 is
 a. 58,000
  b. 91,000
  c. 107,000
  d. 69,300


spencer.martell

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jul 5, 2018
Answer to Question 1

Net accounts receivable is the amount of cash a company can reasonably expect to collect from its accounts receivable. Both the matching principle and conservatism provide support for the allowance method. In order not to overstate net income, estimated bad debts expense should be recorded in the same period as the related sale (matching). In order not to overstate assets, accounts receivable should be reported net of the allowance for uncollectible accounts (conservatism). External users of accounting information rely on net income and asset values when making decisions about doing business with, or buying ownership in, a company.

Answer to Question 2

c


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

Stevens-Johnson syndrome and Toxic Epidermal Necrolysis syndrome are life-threatening reactions that can result in death. Complications include permanent blindness, dry-eye syndrome, lung damage, photophobia, asthma, chronic obstructive pulmonary disease, permanent loss of nail beds, scarring of mucous membranes, arthritis, and chronic fatigue syndrome. Many patients' pores scar shut, causing them to retain heat.

Did you know?

Street names for barbiturates include reds, red devils, yellow jackets, blue heavens, Christmas trees, and rainbows. They are commonly referred to as downers.

Did you know?

Your heart beats over 36 million times a year.

Meiosis Accounts for the Segregation of Alleles p2 Meiosis Accounts for the Segregation of Alleles p2
Examples of criteria for reporting and recording Examples of criteria for reporting and recording
Anatomists disagreed on the importance of the Piltdown Man. Anatomists disagreed on the importance of the Piltdown Man.
Example of calculation of days in accounts receivable (AR). Example of calculation of days in accounts receivable (AR).
Science versus religion: What accounts for the conflict and tension that have existed between them? Science versus religion: What accounts for the conflict and tension that have existed between them?
Flow chart for the diagnosis of hepatitis C. Hepatitis C reporting using the signal-tocutoff ratio. Flow chart for the diagnosis of hepatitis C. Hepatitis C reporting using the signal-tocutoff ratio.
Video: Amniocentesis and CVS Animation

For a complete list of videos, visit our video library