Several policies be followed that are conservative in nature

Assignment Help Financial Accounting

Reference no: EM13744961

The treasurer of Landowska Co. has heard that conservatism is a doctrine that is followed in accounting and, therefore, proposes that several policies be followed that are conservative in nature. State your opinion with respect to each of the policies listed.

(a) The company gives a 2-year warranty to its customers on all products sold. The estimated warranty costs incurred from this year’s sales should be entered as an expense this year instead of an expense in the period in the future when the warranty is made good.

(b) When sales are made on account, there is always uncertainty about whether the accounts are collectible. Therefore, the treasurer recommends recording the sale when the cash is received from the customers.

(c) A personal liability lawsuit is pending against the company. The treasurer believes there is an even chance that the company will lose the suit and have to pay damages of $200,000 to $300,000.The treasurer recommends that a loss be recorded and a liability created in the amount of $300,000.

Reference no: EM13744961

Questions Cloud

Ethical issues relating to marketing and advertising : 1.Research three to five (3-5) ethical issues relating to marketing and advertising, intellectual property, and regulation of product safety and examine whether PharmaCARE violated any of the issues in question.2.Argue for or against Direct-to-Consum..

Takeoff and landing performance : What is the rule of thumb increase in takeoff distance and rotation speed in percentage and what is the climb gradient (%) and climb angle (deg)?

Examining the structure of the national labor relations : 3) Examining the structure of the National Labor Relations Board it is important to remember that both the members of the NLRB as well as the Office of the General Counsel are all appointed to fixed terms by the president of the United States. Discus..

The future direction of the ukraine on an ethical basis. : Argue for or against the future direction of the Ukraine on an ethical basis. Should Ukraine go back to its historical association with Russia, or into a collection of big money countries in the European Union? Use Smeltzer and Jennings's article as ..

Several policies be followed that are conservative in nature : The treasurer of Landowska Co. has heard that conservatism is a doctrine that is followed in accounting and, therefore, proposes that several policies be followed that are conservative in nature. State your opinion with respect to each of the policie..

Cooperative strategies seem to be a good idea : Cooperative strategies seem to be a good idea. Using what you have learned about strategic management and in relation to cooperative strategies, respond to the following questions

Accumulated depreciation—equipment account : Mogilny Company paid $135,000 for a machine. The Accumulated Depreciation—Equipment account has a balance of $46,500 at the present time. The company could sell the machine today for $150,000. The company president believes that the company has a “ri..

Association of machinists and aerospace workers : The International Association of Machinists and Aerospace Workers, AFL-CIO (Union), began soliciting the employees of Whitcraft Houseboat Division, North American Rockwell Corp. (Whitcraft), to organize a union. For three days, Whitcraft management d..

What genre of performance was theater and dance : What genre of performance was Theater and Dance? Where did you see it, and what degree of value is attributed to the performance by that venue?

User Account

All Pages