According to SBA Guidelines, a Manufacturing Firm with 1,000 Employees

question 173

Multiple Choice

According to SBA guidelines, a manufacturing firm with 1,000 employees:

• A) would be classified as a large firm in the industrial sector.
• B) may be classified as a small business depending upon the size of other firms in the industry.
• C) is too small to achieve the efficiencies of large scale production.
• D) is classified as an S corporation.

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Definitions:

Percentage of Receivables

An accounting method used to estimate the value of a company's bad debts based on a percentage of the accounts receivable.

Normal Balance

The usual balance side (debit or credit) of an account in double-entry bookkeeping, determined by the type of account (asset, liability, equity, revenue, or expense).

Financial Statement

Documents that provide an overview of a company's financial condition in both short and long term, including balance sheets, income statements, and cash flow statements.

Direct Write Off Method

A method of accounting for bad debts that involves charging unpaid invoices directly to expense when they are determined to be uncollectible.