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Accounting Questions?
Accounting Questions?
1. Give reasons why business persons sell on credit when there is a chance that they will not be able to collect the debt.
2. Give a acceptable definition of a balance sheet.
3. In three words, state what information is contained in the heading of a balance sheet.
Answers:
ronald.glass@sbcglobal.net: 1 Because of competition 2 It shows the health of a business in a summary form AT A SPECIFIC POINT IN TIME 3 Assets, Liabilities, Equity
2008-02-11 20:05:11
2008-02-11 20:05:11
Chosen Answer
Tom C: 1. without going into a great amount of detail, in general a company that sells product on credit can sell a substantially greater volume of its product than it would be able to if it dealt only in cash sales. Therefore, even though a business that sells on credit may experience some uncollectible accounts, the business will enjoy a much larger sales volume and therefore greater profitability, despite the bad debt losses.
2. statement of the financial position of an economic entity on any given day.
3. assets, liabilities and capital (owner's equity)
2008-02-11 22:53:04
Tom C: 1. without going into a great amount of detail, in general a company that sells product on credit can sell a substantially greater volume of its product than it would be able to if it dealt only in cash sales. Therefore, even though a business that sells on credit may experience some uncollectible accounts, the business will enjoy a much larger sales volume and therefore greater profitability, despite the bad debt losses.
2. statement of the financial position of an economic entity on any given day.
3. assets, liabilities and capital (owner's equity)
2008-02-11 22:53:04