In its December 31, 2013 financial statements, E-Z Prices estimated that losses on its current receivables would be $10.2 million. During 2014, E-Z Prices determined that the losses on the Dec. 31, 2013, receivables were actually $12.4 million. Ignoring taxes, E-Z Prices would report, in its 2014 financial statements, the additional $2.2 million loss on receivables as:
A. An extraordinary item.
B. A prior period adjustment.
C. A retroactive adjustment.
D. A current year's expense.
Ans: D. A current year's expense.
You might also like to view...
Why segment and target?
a. To decide how to price your products b. To decide what magazines are the best places for your ads c. To adapt your product or service to the customer's taste d. All of the above are good reasons for segmenting and targeting.
Which of the following is most likely a true statement about sales compensation in economically tough circumstances?
A) Cutting sales force compensation is usually a last resort for firms that want to maintain positive customer relationships. B) Morale is boosted by distributing commissions equally among low and high sales performers. C) Online selling is discontinued to improve customer relations. D) Compensation for the inside sales force is reduced to increase commissions for the outside sales force. E) Low performers are retained and top performers are dismissed to reduce commission payments.