Szabo Company Computed the Following Data for 2010

question 39

Multiple Choice

Szabo Company computed the following data for 2010. The estimated operating cycle for 2010 is:

• A) 97.4 days
• B) 107.2 days
• C) 93.8 days
• D) 108.0 days
• E) none of the answers are correct

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Definitions:

Net Sales

The total revenue from sales transactions after deducting returns, allowances for damaged or missing goods, and any discounts offered.

Allowance Method

An accounting technique used to estimate and account for bad debts, where a portion of receivable accounts is deemed uncollectable.

Bad Debt Recovery

Occurs when a previously written-off debt is recovered either partially or fully after receiving payment from a debtor.

Allowance Method

An accounting technique used to account for bad debts by estimating uncollectable accounts at the end of each period.