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Accounts receivable management This table, . shows that Blair Supply had an end-of-year accounts receivable balance of $300,075. The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers. a. Use the year-end total to evaluate the firm's collection system. b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? Explain. a. The average collection period is days. (Round to two decimal places.) Since the average age of receivables is about 16 days beyond the net date, attention should be directed to accounts receivable management. (Select from the drop-down menu.) b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? (Select all the answers that apply.) O A. This may explain the lower turnover and higher average collection period. O B. The year-end accounts receivable balance of $300,075 may not be a good measure of the average accounts receivable, thereby causing the calculated average collection period to be overstated. O C. The seasonality of sales also suggests the November figure (0-30 days overdue) is not a cause for great concern. O D. About 13% of all accounts receivable (those arising in July, August and September) are sixty days or more overdue and may be a sign of poor receivables management.

Accounts receivable management This table, . shows that Blair Supply had an end-of-year accounts receivable balance of $300,075. The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers. a. Use the year-end total to evaluate the firm's collection system. b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? Explain. a. The average collection period is days. (Round to two decimal places.) Since the average age of receivables is about 16 days beyond the net date, attention should be directed to accounts receivable management. (Select from the drop-down menu.) b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? (Select all the answers that apply.) O A. This may explain the lower turnover and higher average collection period. O B. The year-end accounts receivable balance of $300,075 may not be a good measure of the average accounts receivable, thereby causing the calculated average collection period to be overstated. O C. The seasonality of sales also suggests the November figure (0-30 days overdue) is not a cause for great concern. O D. About 13% of all accounts receivable (those arising in July, August and September) are sixty days or more overdue and may be a sign of poor receivables management.

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter10: Accounting For Sales And Cash Receipts
Section: Chapter Questions
Problem 9SEB: SCHEDULE OF ACCOUNTS RECEIVABLE From the accounts receivable ledger shown, prepare a schedule of...
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Data table (Click the icon here o in order to copy the contents of the data table below into a spreadsheet.) Month of accounts receivable origin July August September October November December $3,850 2,030 34,050 15,090 52,020 193,035 Year-end accounts receivable S300,075 Print Done
Transcribed Image Text:Data table (Click the icon here o in order to copy the contents of the data table below into a spreadsheet.) Month of accounts receivable origin July August September October November December $3,850 2,030 34,050 15,090 52,020 193,035 Year-end accounts receivable S300,075 Print Done
Accounts receivable management This table, , shows that Blair Supply had an end-of-year accounts receivable balance of $300,075. The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers. a. Use the year-end total to evaluate the firm's collection system. b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? Explain. a. The average collection period is days. (Round to two decimal places.) Since the average age of receivables is about 16 days beyond the net date, attention should be directed to accounts receivable management. (Select from the drop-down menu.) b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? (Select all the answers that apply.) O A. This may explain the lower turnover and higher average collection period. O B. The year-end accounts receivable balance of $300,075 may not be a good measure of the average accounts receivable, thereby causing the calculated average collection period to be overstated. O C. The seasonality of sales also suggests the November figure (0-30 days overdue) is not a cause for great concern. O D. About 13% of all accounts receivable (those arising in July, August and September) are sixty days or more overdue and may be a sign of poor receivables management.
Transcribed Image Text:Accounts receivable management This table, , shows that Blair Supply had an end-of-year accounts receivable balance of $300,075. The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers. a. Use the year-end total to evaluate the firm's collection system. b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? Explain. a. The average collection period is days. (Round to two decimal places.) Since the average age of receivables is about 16 days beyond the net date, attention should be directed to accounts receivable management. (Select from the drop-down menu.) b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? (Select all the answers that apply.) O A. This may explain the lower turnover and higher average collection period. O B. The year-end accounts receivable balance of $300,075 may not be a good measure of the average accounts receivable, thereby causing the calculated average collection period to be overstated. O C. The seasonality of sales also suggests the November figure (0-30 days overdue) is not a cause for great concern. O D. About 13% of all accounts receivable (those arising in July, August and September) are sixty days or more overdue and may be a sign of poor receivables management.
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