Answer the questions below, True or False:
1- Accounts Receivables includes customer or noncustomer transactions with interest component.
2- Trade Discounts can be accounted under the gross and net method:
3- Trade Discounts are created as an inducement for prompt payment from the customers:
4- Under the gross method of accounting for the cash discounts, if the customer pays within the discount period, a sales discount is recognized (contra revenue account):
5- Under the net method of accounting for the cash discounts, if the customer pays within the discount period, a sales discount is recognized (contra revenue account)
6- Under the net method of accounting for the cash discounts, if the customer does not pay within the discount period, a sales discount forfeit is recognized (revenue account):
7- Under the allowance method, we can estimate the uncollectable accounts receivable using either the 1) Percentage-of-Sales Approach and/or 2) Percentage-of-Receivables Approach:
8- Property, plant, and equipment includes only depreciable assets such buildings, and equipment.
9- Property, plant and equipment is to be “used in operations” and for resale.
10- Land could include additional land improvements that have an indefinite life
11- Cost of buildings could include professional fees and building permits
12- Cost of equipment does not include costs of conducting trial runs.