Question: There may be more than one correct answer. 9) The Allowance for Doubtful Accounts (last receivable line item) is a reserve account that is set

There may be more than one correct answer.

9) The Allowance for Doubtful Accounts (last receivable line item) is a reserve account that is set up in anticipation of bad debts. So, if the asset manager sees an Allowance for Doubtful Account of 5,000 for a total City Ledger of 5,000,000, but where a total 60% of the trade debt is over 90 days old.

What is (are) the potential issue(s)?

A. if the hotel would be for sale, this issue will have a serious impact on the valuation of the company

B. +90 days account is clearly too high

C. Allowance for Doubtful Account is clearly too small

D. The operator clearly underestimates its potential exposure unanswered

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