What is cumulative effect of changing the estimated bad debit rate

Q: How do the percent-of-receivables and aging-of-receivables methods compute bad debts expense?

A: In percent of receivables, bad debt expenses are computed as a percentage of total receivables…

Q: Which of the following methods of determining bad debt expense best achieves the matching concept?…

A: Under Percentage of net credit sales Method of determining bad debt expense, the bad debt expense…

Q: What is the  range of possible credit scores. Give examples of bad, average, excellent credit…

A: Credit reporting agencies determine the score(i.e credit score) of the individual. This score is…

Q: Explain in details the accounts receivables and bad debts?

A: Company is carrying the sales activity after performing the cost ascertainment method. In order to…

Q: In the credit market model with asymmetric information, determine how a consumer will respond to an…

A: Asymmetric information In credit market, asymmetric information means the lenders or the borrowers…

Q: Which is better to have? Accounts receivable or notes receivable? And why?

A: Accounting is the process of recording financial transactions that are material to the business. It…

Q: Can you explain briefly the difference between the accounting for receivables allowance methods for…

A: The percentage-of-sales approach calculates doubtful debt accounts based on a term's credit sales.…

Q: Which of the following methods may not be appropiate for estimating bad debt expense? a. percentage…

A: Bad debt expense means those accounts receivables that can not be collected. It depends on the…

Q: Which of the following is an advantage of using the net price method for recording cash discounts on…

A: At the time of recording credit sales, there can be some provision for discount to be given. So,…

Q: When a deposit on returnable containers is forfeited, the firm holding the deposit will experience:…

A: Current liabilities are short-term financial liabilities of a company that are due within a year or…

Q: What is meant by the term abnormal rate of return?

A: Abnormal rate of return is return earned above or below the normal rate of return.

Q: Which of the following is not among the consequences of a loose credit policy ?     a) Sales…

A: Introduction: A loose credit policy refers to a credit policy intending to increase the money supply…

Q: Which is correct with regards to the effects of restricting credit standards? * O An increase in…

A: A credit policy lays out the conditions under which consumers who purchase on credit must pay back…

Q: scuss the process of auditing the following: • Revenue • Receivables • Expected Credit Lo

A: An audit, for example, is a type of on-site verification, similar to an inspection or examination,…

Q: Describe moral hazard in the context of information asymmetries and how it can lead to lower levels…

A: A bank is a type of financial institution that takes deposits and lends money. Wealth management,…

Q: How does collection policy influence sales and the bad debt expenses

A: Solution Note : Dear students as per the Q&A guidelines we are required to answer the first…

Q: receivables turnover ratio

A: Receivable turnover ratio is an important accounting metric used to evaluate the performance of…

Q: Debit

A: Lost or stolen debit or credit both can cause problems. However the problem is more with the debit…

Q: Why is it often difficult for the averageinvestor to take advantage of underpricing?

A: Under Pricing of the stock refers to the situation when the current market price of the company’s…

Q: Indicate the most likely effect of the following changes in credit policy on the receivables…

A:

Q: What does a low credit score mean? The person has a low amount of credit. The person is likely to…

A: A person with a bad credit rating has a low credit score.  A credit score defines the person's…

Q: When the allowance method of recognizing bad debt expense is used, the allowance for doubtful…

A: Allowance for doubtful accounts means where we expect some debts to become bad in near future then…

Q: ales and elect the correct response: O cost of sales cost of accounts receivable O high accounts…

A: Since there are multiple questions are given, but as per answering guidelines we do only first one.

Q: Why are credit rating agencies reliable/unreliable?

A: Credit Rating agencies are unreliable because of the following reasons: 1-Ideological biases: In…

Q: posit multiplier and money multiplier ? Explain.

A: Deposit Expansion Multiplier System The deposit expansion multiplier is also known as Deposit…

Q: What would be the type of the quantity used in the break even analysis for Banks? Ex: Number of…

A: BREAK EVEN POINT

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

A: Direct write-off method does not make allowance or estimation for uncollectible accounts, instead…

Q: how is the assessment in bad credit? note: include a reference

A: Credit scores: These are the 3 digit number that represent  the financial behavior of a person.…

Q: The return of defective merchandise decreases the amount of receivables from the customner. * True O…

A: Account receivable is the amount of which is owned from the customer for the credit sales made to…

Q: Which of the following changes in credit standards and conditions would cause an improvement in…

A: Credit standards refer to the credit policies of a company, the credit period it extends and the…

Q: It is bad money management to use credit. True or false.

A: Using credit is not necessarily a bad thing. Ensuring that the dues are paid on time is a good way…

Q: When is bad debts expense recorded when using the direct write-off method?

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: Which is correct with regards to the effects of restricting credit standards? a. Investment in…

A: Restricting credit standard means company strict the credit policy. When company is more concerned…

Q: What are the major flaws with NPV? What are the major flaws with IRR? If you are going to a bank and…

A: Major flaws with NPV:Requires an assumption of discount rate which is not directly observable in the…

Q: Why are sales, sales returns and allowances, bad debts, cashdiscounts, accounts receivable, and…

A: Financial Statements: Financial statements are written records that convey the business activities…

Q: When using the allowance method for accounting for bad debts, accounts receivable is reported on the…

A: The allowance for doubtful accounts is created to record estimated bad debt expense for the period.

Q: What is a credit limit? How does it impact credit utilization (debit-credit ratio) and why is that…

A: Credit Limit :- Credit limit is an limit of spending on an Customer or its the maximum credit can a…

Q: Question  If the % of uncollectible accounts does not change, there cannot be a savings for this…

A: Bad Debt and Allowance for Bad debt: When a customer is unable to pay the amount due, the amount…

Q: Which among the statements is not correct?  a. Net realizable value of accounts receivable results…

A: Account receivable means the amount due from customer whom we sold the goods on credit. Allowance…

Q: Diffrence between debit and credit ?

A: Debit and credit are two sides of general ledger account. For some accounts, debit means increase…

Q: Which account type is used to record bad debt estimation and is a contra account to Accounts…

A: Please find the answer to the above question below: