Refer to the section of Chapter 3 entitled “Adjusting Entries.” Then answer the following questions. Ensure the answers are detailed. Retain the numbering of the questions; that is, 1, 2, 3, etc.
- Who determines how long buildings and furniture and equipment are to last?
- Suppose we were to change asset depreciation on buildings and furniture and equipment from 5% to 4%, and from 10% to 8%. What would be the effect on net income? Would it increase or decrease?
- Who determines the dollar amount of accounts receivable that are doubtful?
- Suppose that our estimate of the balance in Allowance for Bad Debts was reduced from $1,100 to $ 1,000. What would be the effect on net income?
- Is the adjusting entry process an exact science, where accountants can determine exactly how well a company has done for a period? Or, is accounting an art that requires significant judgment on the part of the accountant?
- What are the dangers for the accountant when making an estimate in an area (such as, bad debts) where significant judgment is required?
Your well-written paper must be two to three pages in length, in addition to the title and reference pages, and be formatted according to the CSU-Global Guide to Writing and APA Requirements. Cite at least three peer-reviewed sources, in addition to the required readings for this module.
Your submission must be well organized and written responses must be formatted according to the CSU-Global Guide to Writing and APA Requirements. Be sure to submit only one document to be graded for this assignment.
Wahlen, J., Jones, J., & Pagach, D. (2017). Intermediate Accounting: Reporting & Analysis (2ndEdition). Boston, MA: Cengage Learning.