In each of the following situations, identify whether the setting is primarily financial accounting or managerial...

 

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In each of the following situations, identify whether the setting is primarily financial accounting or managerial accounting. a. Abba Company purchased a new telephone system costing $132,000 for its sales division. The new phone system will be depreciated using the straight-line method over a period of five years and has an estimated salvage value of $5,000. b. Bandex Company has had several customers who are experiencing the negative effects of the downturn in the economy. As a result, the company beleves its allowance for doubtful accounts should be increased from 1% of credit sales to 1.5% of credit sales. c. Cortez, Inc. has experienced a decline in net income over the past three years. The engineering department is considering redesigning a product to Managerial eliminate waste and inefficiency in the production process. d. The sales manager of Decca Corporation believes one salesman is creating fictitious sales to inflate his commission. The sales manager has asked the Financial controller for a detailed report of sales by salesman. Esser, Inc. executives are meeting to analyze the company's actual results compared to budgeted amounts. Click if you would like to Show Work for this question: Open Show. Work In each of the following situations, identify whether the setting is primarily financial accounting or managerial accounting. a. Abba Company purchased a new telephone system costing $132,000 for its sales division. The new phone system will be depreciated using the straight-line method over a period of five years and has an estimated salvage value of $5,000. b. Bandex Company has had several customers who are experiencing the negative effects of the downturn in the economy. As a result, the company beleves its allowance for doubtful accounts should be increased from 1% of credit sales to 1.5% of credit sales. c. Cortez, Inc. has experienced a decline in net income over the past three years. The engineering department is considering redesigning a product to Managerial eliminate waste and inefficiency in the production process. d. The sales manager of Decca Corporation believes one salesman is creating fictitious sales to inflate his commission. The sales manager has asked the Financial controller for a detailed report of sales by salesman. Esser, Inc. executives are meeting to analyze the company's actual results compared to budgeted amounts. Click if you would like to Show Work for this question: Open Show. Work

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Financial accounting primarily involves decisions taken with respect to the financial aspects of the ... View the full answer