An examination of the balance sheet of Family Dollar Stores, Inc., shows no allowance for bad debts.

Question:

An examination of the of Family Dollar Stores, Inc., shows no allowance for bad debts.
1. Under what conditions would a company be allowed to omit this account from the Does this make sense for Family Dollar Stores, Inc.?
2. Many of Family Dollar Stores, Inc.’s customers pay with credit cards. How do you think those sales are reflected on the financial statements?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...