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Author Question: A voucher is a written authorization to make a cash payment. a. True b. False Indicate whether ... (Read 117 times)

robinn137

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on: Jul 5, 2018
A voucher is a written authorization to make a cash payment.
 a. True
  b. False
 
   Indicate whether the statement is true or false

Question 2

Since C.D. Lee's bonus is tied to net income, he decided to underestimate the bad debts expense for the year ended December 31, 2012.
 
  Which 2012 financial statements will be impacted by this underestimate of bad debts expense? Since bad debts expense is just an estimate, is this treatment ethical?
  What will be an ideal response?


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guyanai

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Reply #1 on: Jul 5, 2018
Answer to Question 1

True

Answer to Question 2

The income statement (bad debts expense and net income), the statement of changes in shareholders' equity (net income and retained earnings) and the balance sheet (allowance for uncollectible accounts, current assets and total assets, and retained earnings) will be impacted by underestimating bad debts expense. This treatment is not ethical.


robinn137

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Reply #2 on: Jul 5, 2018
Thank you :)


guyanai

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Reply #3 on: Jul 5, 2018
Happy to help you


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