Use the Following Firm Working Capital Cycle Information for Questions

question 14

Multiple Choice

Use the following firm working capital cycle information for questions
$\begin{array}{ll}\text { Days accruals}&10 \\\text {Days cash }& 7\\\text {Days inventory }& 33\\\text {Days accounts payables }& 21\\\text {Days accounts receivables }&35 \\\\\text { Average Daily COGS }&\$15\end{array}$

-A loan where the entire principal is due at maturity is called a:

---

Definitions:

Allowance Method

An accounting technique that anticipates and adjusts for potential future bad debts or credit losses.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.

Allowance for Doubtful Accounts

A contra-asset account that estimates the portion of accounts receivable which may not be collected, reducing the reported amount of receivables.

Bad Debt Expense

The cost a company incurs because of the inability to collect payments from customers for credit sales, recognized as an expense.