A limitation of the direct write-off method of accounting for bad debts is:
1. Inaccurately determines bad debt expenses
2. Difficult to trace amounts written off
3. Always fails to satisfy the matching principle
4. Not appropriate where bad debts are material
If Net Sales Revenue is $108,000, Gross profits are $28,000 and Operating expenses are $12,000. What is the Cost of Goods Sold and Net Profit or Loss?
1. COGS $38,000 and Profit $98,000
2. COGS $88,000 and Proft $10,000
3. COGS $80,000 and Proft $16,000
4. COGS $98,000 and Loss $38,000
Which step in the accounting cycle occurs prior to the preparation of the financial statements?
1. Record and post adjustments
2. Analyse transactions
3. Analyse the changes in the accounts
4. Close the accounts
Bluefield Limited is considering a project that will require an initial investment of $50 000 and is expected to generate future net cash flows of $10 000 annually for years 1 to 3 and $5000 annually for years 4 to 10. The project's payback period is:
1. 4 years
2. 5 years
3. 6 years
4. 7 years