Examlex

Solved

Computer Consultants Inc

question 14

Essay

Computer Consultants Inc., began business as an adviser to chains of retail stores. The company assisted the stores in the selection of hardware and the development of software used by retail chain stores. Later the company developed software and sold it to its customers. The company also began selling some of the equipment to the customers. That is, the company would bid on a job to purchase and install equipment and the software. The company has consistently reported its income by the cash method. At the end of the year, the company has substantial accounts receivables from clients and a small amount of inventory on hand. What advice can you offer the company regarding its accounting method?


Definitions:

Interest Rate

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Endowment

In economics, an endowment is the total range of assets, including both physical goods and intangible elements like labor skills, that an individual or entity owns.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.

Related Questions