Many firms provide similar types of airline services with similar types of assets.They each received unqualified opinions from their independent auditors.Yet, Flash Airlines appears to apply its accounting principles more aggressively in income-enhancing ways relative to its competitors.The choices for Flash Airlines in applying generally accepted accounting principles under the accrual basis of accounting include:

Question

Quizplus · Accepted Answer

All of the choices (A, B, and C) are applicable to Flash Airlines in applying generally accepted accounting principles under the accrual basis of accounting. Depreciable lives for buildings and equipment allow for the allocation of costs over the useful life of an asset, estimated uncollectibles for accounts receivable recognize the possibility of non-payment by customers, and estimated warranty costs recognize the potential costs of fulfilling warranties on products sold. These choices are all appropriate and commonly used in the airline industry, and applying them aggressively can have an income-enhancing effect.

Many Firms Provide Similar Types of Airline Services with Similar