In this week’s Discussion, you will analyze the accounting policies of a company, and discuss your findings with your colleagues. How does the company account for its receivables? Did the company manage its receivables effectively?
Select any publicly traded manufacturing or merchandising company. Visit the company’s website, and locate their SEC filings, in particular their 10-K. These filings will include their financial statements and notes to those statements. In these statements, find the section on significant accounting policies and look at the note to those financial statements (usually the first note).
Post at least 200 words addressing the following points:
- How did the company value its receivables?
- How did it determine the balance in the allowance for doubtful accounts?
- Did the allowance for doubtful accounts remain constant as a percentage of gross receivables for all the years presented? Explain the results of this analysis.
- Identify the amount of receivables written off. In light of these write-offs, discuss how effectively this company has managed its receivable collections over the periods presented.
Read a selection of your colleagues’ postings.