GENERAL LEDGER Flashcards
1
Q
Fair value
A
Is the price of the asset contributed by the owner that would be received if that asset was sold at the time it was acquired by the business. It shows a faithful representation of the value of the asset as it takes into account the wear and tear of the asset prior to it being in the business. It helps with decision making purposes. It cannot be verified as no source document.
2
Q
Would trial balance detect errors?
A
Trial balance would not detect any errors if the entries are recorded with equaling debits and credits. It does not balance if an entry has 2 credits or 2 debits.
3
Q
Ways a business can improve accounts receivable turnover
A
Organize debt collectors, reduce discounted period to less time.
