Sleepy Monk Coffee Company operates a chain of retail coffee shops and also sells its signature roasted coffee to local resorts.Which of the following accounting estimates would be most important for Sleepy Monk Coffee Company?
A)Uncollectible accounts receivable.
B)Warranty claims.
C)Depreciable lives for its operating assets.
D)Sales returns.

Question

Quizplus · Accepted Answer

Since Sleepy Monk Coffee Company operates a chain of retail coffee shops, the depreciable lives for its operating assets would be most important as they would have a significant amount invested in their equipment, furniture, and fixtures. Knowing the depreciable lives would help them accurately allocate their depreciation expense over time, which would impact their profit and loss statement.

Sleepy Monk Coffee Company Operates a Chain of Retail Coffee