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:

Proportions

Ratios or fractions that express the relationship of one part to another or to the whole with respect to quantity, size, or amount.

Profit

The financial gain achieved when the revenue from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Production Function

A mathematical expression that describes the relationship between input factors of production (like labor and capital) and the output of goods or services.

Labor

Labor refers to the human effort, both physical and mental, used in the production of goods and services.