Trashbin Is a Waste Disposal Company

question 8

Essay

Trashbin is a waste disposal company.Explain the effect the following actions of the management of Trashbin Company might have in managing earnings:

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Definitions:

Dishonored Note

A promissory note that has not been paid by the maker at its maturity date.

Interest Calculation

The process of determining the amount of interest earned or paid over a period of time on investments or loans.

Direct Write-Off Method

A method of accounting for bad debts that writes off an outstanding account receivable as a bad debt expense only when it becomes evident the debt is uncollectible.

Reinstatement

The process of restoring a previous condition or position, such as reinstating a lapsed insurance policy or an employee's job position.