An example of this would be when a customer is not able to pay their bill because due to a downturn in the economy, money may be tight if they have been laid off from their jobs or faced with unexpected hospital bills. Under the direct write-off method, companies record bad debts expense in a period that is different from the period in which they record the revenue. The method does not attempt to match bad debts expense to sales revenues in the income statement. The direct write-off method show accounts receivable in the balance sheet at the amount the company actually expects to receive. Unfortunately, unless bad debt losses are insignificant to the company, the direct write-off method is not acceptable for financial reporting
Individuals are losing jobs and the government have to spend more money of benefits. They collected back less from taxes and VAT. Businesses are cutting back on productions but for some customers is good if they have money because the prices are falling as well as inflation. At the boom stage the GDP (Gross Domestic Product) are the values of
These methods are usually applied through the central bank in the UK The monetary policy contains buying and selling of national debt, changing the credit restrictions in the county and changing the interest rates this is done by changing backup requirements. I am now going to talk about how monetary policies affect aldi. Over the years since the country has been through some difficult financial times the interest rates have risen and this has affected aldi. This is because there is less disposable income for consumers to spend which results in the buying only the essentials which they need to go throughout the week. On the other hand this has benefited aldi because more consumers would rather go to aldi than Tesco or Morrison’s because they are cheaper and they have good quality on the goods and
Not enough money and too much stress lowers the quality of life that people have, and their standards of living also drop, as they are forced to get by with cheap, low-quality items (Nickels, McHugh & McHugh, 2010). Walmart has changed how the retailer and the manufacturer negotiate prices. The manufacturer used to be the one to tell the retailer, "I can make this for you for this much." But Walmart has become so big, so important, that now they
Consequences and solutions to cash flow problems Factor | Why It Causes a Cash Flow Problem | Low profits or (worse) losses | There is a direct link between low profits or losses and cash flow problems. Remember - most loss-making businesses eventually run out of cash | Over-investment in capacity | This happens when a business spends too much on production capacity. Factory equipment which is not being used does not generate revenues – so is often a waste of cash | Too much stock | Holding too much stock ties up cash and there is an increased risk that stocks become obsolete (i.e. it can’t be sold) | Allowing customers too much credit | Customers who buy on credit are called “trade debtors” Offering credit to customers is a good way to build revenue, but late payment is a common problem and slow-paying customers put a strain on cash flow
The UK government in recent years has had to resort to financial cutbacks due to the recession, especially funds for the public services. This had has a large impact on the public services, majority of them being negative. An example could be there have been many Fire station closures within the UK. The fire service in recent years has vastly improved, this can be show by the number of fires is annually decreasing. This means the government does not see the need to have as many fire men/women and therefore made many redundant and closed down fire stations in order to save money.
One of the problems is that it reduces the funds available for businesses to invest. People are attracted to high interest rates and the security of investing in the government which attracts them use their savings and profits to buy bonds. However, money spend on the government is one fewer dollar for investments. Crowding-out effect is caused because of loss of funds for private investment due to government borrowing. It hurts and slows down economic growth.
While this feature can be used to explain incidents and changes that have occurred within society there is still a large gap between the resources available to those who are considered lower class or underclass compared to those with wealth within the United Kingdom and according to The Guardian newspaper inequality has risen faster in Britain than in any other country since 1975. The family would be unable to access the resources that would be available to those in power due to their wealth and social status however due to these factors Conflict Theorists would suggest that they would never gain access to them as the “ruling classes” would continue to oppress the lower classes in order to keep the resources for
• These all factors are affected by high inequality. • High inequality also reduces people accessibility towards resources even it threatens the political condition of the economy, discourages the behavior of people towards individuals or enterprises and this become the hinder towards economic growth. • If we talk about countries which have high growth but low living standard then I will prefer countries like India and China in both the countries there growth rate is rising but there standard of living is not that much high. • GNP is the value of product and services by a labor and property which is supplied by the people of that country and it is calculated in one year but it is not considered the way on which the wealth is distributed .in case of underdeveloped countries only one percent of the population is maybe controlling 80 percent wealth. • Economy may be expand and by this GNP increase at high rate but the people may not experience any of the change or rise in their living
Why might it cost the Ritz-Carlton less to “do things right” the first time? There are high direct costs involved in fixing mistakes. Specially in the service industry, those mistakes can cause a huge loss of future revenue. When dealing with high-end clientele, they are likely to have fewer customers than a mid-level hotel. Therefore, the loss of just a few customers could cost them a lot.