Use This Information to Answer the Following Questions

question 62

Multiple Choice

Use this information to answer the following questions:
At year-end, Shifty Ltd had a balance of accounts receivable of $90 000 and an allowance for doubtful debts of $4000. It was decided to write off the debt of Wriggler, totalling $2500, as irrecoverable. It was further decided that the allowance for doubtful debts should stand at 5% of accounts receivable.
-The allowance for doubtful debts account would appear in the balance sheet under:

• A) current assets
• B) current liabilities
• C) shareholders' equity
• D) property,plant and equipment.

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Definitions:

Actual Output

The actual total value of goods and services produced by an economy over a specific period.

Potential Output

Potential output refers to the maximum amount of goods and services an economy can produce when it uses its resources fully and efficiently, without prompting inflation.

Cash Conversion Cycle

A metric that expresses the duration (in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

DSO

Days Sales Outstanding, a measure of the average number of days that a company takes to collect revenue after a sale has been made.