How would you describe the entries to record the disposition of accounts receivables? What is their function?
The account receivable is disposed off when they are received in cash and the entry is made to close the account receivable control account and the customer individual account. After passing the entry the account receivable is converted into cash. [ The account receivable may be disposed off if they are not received for any reason, at this time the account receivable account is closed against bad debts expense or allowance for bad debts accounts. ] Auto answered|Score 1|dennis003|Points 767|User:
How are bad debts accounted for under the direct write-off method? What are the disadvantages of this method?
Under the direct write off method, the bad debts expenses are recorded when the customer does not pay its due amount to the company, as no allowance for doubtful debts is maintained under this method. [ It is used where most of the customers are good and they normally pay within time period. But for some reason, like death or bankruptcy, the customer could not pay its due amount. As there is no allowance or provision is kept for bad debts therefore it does not follow the matching principle of account as the bad debt expense should be recorded for the period for which sales had been made. ] Auto answered|Score 1|dennis003|Points 767|User:
• Pendergrass Company hires an accounting intern who says that intangible assets should always be amortized over their legal lives. Is the intern correct? Explain. Weegy:
The intern is correct. Intangible assets should be amortized over their legal lives. Companies account for intangible assets much as they account for depreciable assets and natural resources. [ The cost of intangible assets is systematically allocated to expense during the asset's useful life or legal life, whichever is shorter, and this life is never allowed to exceed forty years. The process of allocating the cost of intangible assets to expense is called amortization. www.cliffsnotes.com/study_guide/Intangible-Assets.topicArticleId-21081,articleId-21080.html
] Auto answered|Score 1|debnjerry|Points 38563|User:
• What are the basic issues related to accounting for intangible assets? Weegy:
Intangible assets are defined as identifiable non-monetary assets that cannot be seen, touched or physically measured, which are created through time and/or effort and that are identifiable as a separate asset. [ There are two primary forms of intangibles - legal intangibles (such as trade secrets (e.g., customer lists), copyrights, patents, and trademarks) and competitive intangibles (such as knowledge activities (know-how, knowledge), collaboration activities, leverage activities, and structural activities). Legal intangibles are known under the generic term intellectual property and generate legal property rights defensible in a court of law. Competitive intangibles, whilst legally non-ownable, directly impact effectiveness, productivity, wastage, and opportunity costs within an organization - and therefore costs, revenues, customer service, satisfaction, market value, and share price. Human capital is the primary source of competitive intangibles for organizations today. Competitive intangibles are the source from which competitive advantage flows, or is destroyed. The area of finance that deals with intangible assets is known as Intangible Asset Finance.
] Auto answered|Score 1|MrG|Points 1508|User:
• Why would you select the percentage of sales method for calculating doubtful accounts instead of the percentage of receivables method?
I am sorry. But no one in the world knows the answer to that question. We have gone to every state and country but no one knows why. [ Heck, we dont even understand the question!
Percentage of sales is based on the company history, or perhaps the industry standard for losses. If business has been steady than it is simple to predict based on past history what the uncollectible accounts will be.
If there is no past history to judge by or industry standard, than percentage of account receivables takes a percentage of the actual amounts due at the end of the period.
Since Sarbanes-Oxley Act of 2002, it is very important to have a reliable method of judging receivables, often the biggest liquid asset of any accrual based company. (all public companies). You need to know how much receivables will actually be received to properly value the company.
] Auto answered|Score 1|truthmatters|Points 26|User:
• Is it appropriate to use a hybrid of the percentage of sales and the percentage of receivables methods of calculating the allowance for doubtful accounts? Do the generally accepted accounting principles allow for using both methods at the same time? Why? Weegy:
... appropriate to use a hybrid of the percentage of sales and the percentage of receivables methods of calculating the allowance for doubtful [ accounts? ... hybrid of the percentage of sales and the percentage of receivables methods? No. It is not practical or correct to use both methods as the same time. http://wiki.answers.com/Q/Is_it_appropriate_to_use_a_hybrid_of_the_percentage_of_sales_and_the_percentage_of_receivables_methods_of_calculating_the_allowance_for_doubtful_accounts
] Auto answered|Score .8643User:
• What are the differences between revenue expenditures and capital expenditures? Explain the entries of each.
Important entries in ... What is the difference between net profit and net income? ... [ types of expenditures: capital expenditure (long-term assets like machinery) and revenue ... http://wiki.answers.com/Q/FAQ/3882-5
] Auto answered|Score .8893
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