In order to generate interim financial reports that contain a reasonable portion of annual expenses, which of the following statements is true? a. an allocation of a portion of an annual bonus would be made as an interim adjustment b. any adjustments for inventory shrinkage would be deferred to year end c. the allowance for uncollectible accounts receivable will be revised at year end d. None of the above are true
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
In order to generate interim financial reports that contain a reasonable portion of annual expenses, which of the following statements is true?
|
a. |
an allocation of a portion of an annual bonus would be made as an interim adjustment |
|
b. |
any adjustments for inventory shrinkage would be deferred to year end |
|
c. |
the allowance for uncollectible |
|
d. |
None of the above are true |
Step by step
Solved in 2 steps
