Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. globo gym services management have been actively p

Globo Gym Services management have been actively pursuing clients who fail to pay invoices when...

70.2K

Verified Solution

Question

Accounting

Globo Gym Services management have been actively pursuing clients who fail to pay invoices when they fall due. Based on the experience of Globo Gym Services in the 2021 financial year which ends on December 31, 20% of clients (based on sales revenue) have not and cannot pay their invoices when they fall due. These clients typically close their gyms and can never pay amounts due to Globo Gym Services. Answer the following:

(a) Identify the method and approach that is appropriate to account for bad debts in this case. (2 marks) (b) With reference to three relevant accounting principles, assumptions and/or qualitative characteristics, justify why the method and approach you have identified in part (a) is appropriate. (6 marks)

Clearly label each part of your answer related to parts a and b above. In particular for part b, structure your answer as follows for each of the three relevant accounting principles, assumptions and/or qualitative characteristics: Identify accounting principle, assumption or qualitative characteristic......... Justify method and approach appropriateness in the context of accounting principle, assumption or qualitative characteristic above........

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students