Which of the Following Statements in Respect of the Management

question 17

Multiple Choice

Which of the following statements in respect of the management of receivables best reflects the reality for Posers?

• A) Receivables have gone up as expected in line with the increase in sales
• B) There is no cause for concern as they are stable over time
• C) The collection period has increased by around 50% which is concerning
• D) The collection period has nearly doubled which is very concerning

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Definitions:

Temporary Difference

A discrepancy between the tax basis of an asset or liability and its carrying amount on the balance sheet, which will eventually settle and affect taxable income.

Book Income

A company's income as reported in its financial statements, representing the difference between revenues and expenses.

Income Tax Rate

The portion of a person's or company's earnings that is handed over to the state in the form of taxes.

Deferred Income Tax Liability

A tax obligation that a company owes but has not yet paid, resulting from temporary timing differences between its accounting earnings and its taxable income.