Question
In: Accounting
You have been hired as a consultant by a parts manufacturing firm to provide advice in...
You have been hired as a consultant by a parts manufacturing firm to provide advice in regards to the proper accounting methods the company should use in some key areas. In the area of receivables, the company president does not understand your recommendation to use the allowance method for uncollectible accounts. She stated, "Financial statements should be based on objective data rather than the guesswork required for the allowance method. Besides, since my uncollectibles are fairly constant from period to period, with significant variations infrequently, the direct write-off method is just as good as the allowance method."
Draft a one-page response to the president, in the form of a memo, to support your recommendations for the company to use the allowance method. In your response, present the positives and negatives of both the allowance and direct write-off methods, and be as persuasive as possible.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
You have been hired as a consultant by a parts manufacturing firm to provide advice as...
You have been hired as a consultant by a parts manufacturing
firm to provide advice as to the proper accounting methods the
company should use in some key areas. In the area of receivables,
the company president does not understand your recommendation to
use the allowance method for uncollectible accounts. She stated,
"Financial statements should be based on objective data rather than
the guesswork required for the allowance method. Besides, since my
uncollectibles are fairly constant from period to period,...
You have been hired as a consultant by a parts manufacturing firm to provide advice as...
You have been hired as a consultant by a parts manufacturing
firm to provide advice as to the proper accounting methods the
company should use in some key areas. In the area of receivables,
the company president does not understand your recommendation to
use the allowance method for uncollectible accounts. She stated,
“Financial statements should be based on objective data rather than
the guesswork required for the allowance method. Besides, since my
uncollectibles are fairly constant from period to period,...
Topic: You have been hired as a consultant by a parts manufacturing firm to provide advice...
Topic: You have been hired as a consultant by a
parts manufacturing firm to provide advice as to the proper
accounting methods the company
should use in some key areas. In the area of receivables, the
company president does not understand your recommendation to use
the
allowance method for uncollectible accounts. She stated "Financial
statements should be based on objective data rather than the
guesswork required of the allowance method. Besides, since my
uncollectibles are fairly constant...
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