The Data Presented Below Is for Falconi, Inc ? What Is the Effect on Liquidity When Falconi Records

question 14

Multiple Choice

The data presented below is for Falconi, Inc.for 2016. $\begin{array}{lr}\text { Credit sales during the year } & \$ 2,100,000 \\\text { Accounts receivable-December 31, 2016 } & 395,000 \\\text { Allowance for doubtful accounts-December 31,2016 } & 20,000 \\\text { Bad debt expense for the year } & 17,000\end{array}$ ? What is the effect on liquidity when Falconi records its estimate for bad debt expense using the allowance method?

• A) Liquidity decreases
• B) Liquidity increases
• C) Liquidity stays the same
• D) Liquidity both increases and decreases

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Definitions:

Personnel Utilization

The effective use of staff members within an organization to maximize productivity and efficiency.

Job Design

The process of organizing tasks, duties, and responsibilities into a productive work unit to accomplish organizational objectives efficiently.

Job Characteristics Theory

A theory that suggests certain job characteristics can improve employee job satisfaction, motivation, and productivity by enhancing psychological states related to the work.

Core Job Dimension

Fundamental aspects of a job that affect employee motivation and job satisfaction, such as skill variety, task identity, and feedback.