Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Question
Chapter 13, Problem 2MCQ
To determine
Ascertain that which of the following options would not directly change the receivables turnover ratio for a company.
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Students have asked these similar questions
Question Which of the following changes in credit standards and conditions would cause an improvement in profit?
A) An increase in the percentage of doubtful collections.
B) An increase in collection expenses.
C) Decrease in units sold
D) Increase in the turnover of accounts receivable.
Which of the following statements about receivables turnover is false?
Receivables turnover measures the efficiency of the firm in managing and selling inventory
Receivables turnover measures the liquidity of the firm's receivables
Receivables turnover is calculated with revenue in the numerator
A low receivables turnover indicates efficient receivables management
Question Which of the following changes in credit standards and conditions would cause an improvement in profit?
A) Increase in the turnover of accounts receivable
B) Decrease in units sold
C) Increase in collection expenses
D) An increase in the percentage of doubtful accounts receivable.
Chapter 13 Solutions
Financial Accounting
Ch. 13 - Who are the primary users of financial statements?Ch. 13 - When considering an investment in stock, investors...Ch. 13 - How does product differentiation differ from cost...Ch. 13 - What are the two general methods for making...Ch. 13 - What are component percentages? Why are they...Ch. 13 - What is ratio analysis? Why is it useful?Ch. 13 - What do profitability ratios focus on? What is an...Ch. 13 - What do turnover ratios focus on? What is an...Ch. 13 - What do liquidity ratios focus on? What is an...Ch. 13 - What do solvency ratios focus on? What is an...
Ch. 13 - What do market ratios focus on? What is an example...Ch. 13 - Prob. 12QCh. 13 - Explain why rapid growth in total sales might not...Ch. 13 - A company has total assets of 500,000 and...Ch. 13 - Prob. 2MCQCh. 13 - Prob. 3MCQCh. 13 - Prob. 4MCQCh. 13 - Prob. 5MCQCh. 13 - Prob. 6MCQCh. 13 - Prob. 7MCQCh. 13 - Prob. 8MCQCh. 13 - Prob. 9MCQCh. 13 - Prob. 10MCQCh. 13 - Prob. 13.1MECh. 13 - Prob. 13.2MECh. 13 - Prob. 13.3MECh. 13 - Computing the Financial Leverage Percentage...Ch. 13 - Analyzing the Inventory Turnover Ratio A...Ch. 13 - Prob. 13.6MECh. 13 - Prob. 13.7MECh. 13 - Prob. 13.8MECh. 13 - Prob. 13.9MECh. 13 - Prob. 13.10MECh. 13 - Using Financial Information to Identify Companies...Ch. 13 - Prob. 13.2ECh. 13 - Prob. 13.3ECh. 13 - Prob. 13.4ECh. 13 - Prob. 13.5ECh. 13 - Prob. 13.6ECh. 13 - Prob. 13.7ECh. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Inferring Financial Information from Ratios E13-11...Ch. 13 - Prob. 13.12ECh. 13 - Prob. 13.13ECh. 13 - Prob. 13.1PCh. 13 - Prob. 13.2PCh. 13 - Prob. 13.3PCh. 13 - Prob. 13.4PCh. 13 - Prob. 13.5PCh. 13 - Computing Comparative Financial Statements and...Ch. 13 - Analyzing Financial Statements Using Ratios Use...Ch. 13 - Prob. 13.8PCh. 13 - Prob. 13.9PCh. 13 - Prob. 13.1APCh. 13 - Prob. 13.2APCh. 13 - Calculating Profitability, Turnover, Liquidity,...Ch. 13 - Prob. 13.4APCh. 13 - Prob. 13.5APCh. 13 - Prob. 13.6APCh. 13 - Prob. 13.1CPCh. 13 - Prob. 13.2CPCh. 13 - Comparing Companies within an Industry Refer to...Ch. 13 - Prob. 13.4CPCh. 13 - Inferring Information from the DuPont Model Ratios...Ch. 13 - Prob. 13.6CP
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Similar questions
- Which is correct with regards to the effects of restricting credit standards? a. Investment in accounts receivable will likely increase b. An increase in recognition of doubtful accounts expense will probably happen c. Positive impact on the net profit can be noted from decline in the quantity of goods sold d. Quantity of units sold will probably decrease and will result to a lower sales revenuearrow_forward1. One of the assessments made in credit sales is unwillingness to pay, please explain what is meant by that term? 2. What is the inventory stability method? *I NEED THIS ASAP, PLEASE HELP THANKS!arrow_forwardWhich of the following items in the balance sheet does NOT have a constant relationship with sales in general when we use the percent of sale method to construct pro forma financial statements? Retained earnings Inventory Accounts receivables Accounts payablesarrow_forward
- Which of the following methods may not be appropiate for estimating bad debt expense? a. Percentage of net credit sales b. Percentage of outstanding accounts receivables c. Aging of accounts receivables d. Percentage of salesarrow_forwardA bank that is examining the ratio of annual costs of goods sold to average inventory, is examining which category of ratios? a.Profit measures b.Operating efficiency measures c.Liquidity measures d.Expense control measuresarrow_forwardWhich of the following methods may not be appropiate for estimating bad debt expense? a. percentage of net credit sales b. percentage of outstanding accounts receivable c. aging of accounts receivable d. percentage of salesarrow_forward
- 7. Which of the following statements regarding the gross and net methods for trade accounts payable is not true? a. the net method overstates accounts payable at the end of the accounting periodb. the net method highlights management inefficiency because purchase discounts lost arerecorded whenever an invoice is paid after the cash discount period has expiredc. the gross method is more widely used in practiced. the net method more accurately measures liquidityarrow_forwardIn the percentage of sales basis, companies examine their receivables by preparing an aging schedule. * True False The return of defective merchandise decreases the amount of receivables fromarrow_forwardB-Marts' large proportion of merchandise held on consignment from suppliers. Which account balance assertion for inventory would this cause to be most at risk? Select one: a.Presentation. b.Cut-off . c.None of the given answers is correct. d.Existence.arrow_forward
- 3.Which of the following transactions would not result in an adjustment to the inventory account under a perpetual inventory system? A)The return of merchandise by a customer. B)The sale of merchandise for cash. C)The sale of merchandise on credit. D)The receipt of payment from a customer within the discount period.arrow_forwardWhich of the following accounts does not belong in the purchases and disbursement cycle? Group of answer choices a.Prepayments b.Accounts payable c.Sales returns and allowances d.Fixed assetsarrow_forwardWhich of the following statements is false regarding the different bases used for the allowance method? O A. Three bases are generally accepted, the percentage of sales, the percentage of receivables, and the direct write-off. O B. Management can choose whichever basis it prefers. o C. If management wishes to emphasize the cash realizable value of receivables it will select the percentage of receivables basis. O D. The company must determine its past experience with bad debt losses regardless of which basis it selects.arrow_forward
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