Question

(a) Define the term debtors.
(b) Using information from Table 1:
(1) construct a fully labelled balance sheet for Papel for the end of October 2018;
(ii) calculate the current ratio for Papel for the end of October 2018.

(c) Explain one possible strategy, other than elimination of credit sales, for Papel to
improve its liquidity position.

Answer 1

Answer:

a)A debtor or debitor is a legal entity that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person.