(a)
Concept Introduction
The accounts receivable turnover for the current year.
(b)
Concept Introduction
Accounts Receivable Turnover Ratio: The accounts receivable turnover ratio is a financial indicator that shows how effectively a business collects the amount receivable from its customers. The ratio counts the number of times throughout a certain time frame that receivables are converted to cash.
The best company to manage the receivables.
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- Review the select information for Bean Superstore and Legumes Plus (industry competitors), and then complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places.arrow_forwardUse the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of the Campbell Soup Company and American Eagle Outfitters, Inc.a. Compute the average accounts receivable turnover ratio for Campbell Soup and American Eagle for the years shown in Exercises 9-27 (See attachment) and 9-28 (See attachment).b. Does Campbelll Soup or American Eagle have the higher average accounts receivable turnover ratio?c. Explain why the average turnover ratios are different in (b).arrow_forwardWhich of the following can have a VERY high amount of accounts receivable & long receivables collection period? O Bank O Retail B2B (Business to business) Retail B2C (Business to customer) O Utility companyarrow_forward
- Please help with the following question COMPLETION STATEMENTS 1.Notes and accounts receivable that result from sales transactions are often called______________ receivables. 2.Two accounting problems associated with accounts receivable are (1) ______________ and (2) ______________ accounts receivable. 3.The net amount expected to be collected in cash from receivables is the _____________. 4.When credit sales are made, _________________ Expense is considered a normal and necessary risk of doing business on a credit basis. 5.The two methods used in accounting for uncollectible accounts are the ____________ method and the ______________ method. 6.Allowance for Doubtful Accounts is a_____________ account which is ______________ from Accounts Receivable on the balance sheet. 7.When the allowance method is used to account for uncollectible accounts, ____________ is debited when an account is determined to be uncollectible. 8.The _________________ basis of…arrow_forwardIndicate using a (1), (−), or (0) whether each of the following events would probably cause accounts receivable (A/R), sales, and profits to increase, decrease, or be affected in an indeterminate manner: A/R Sales ProfitsThe firm restricts its credit standards. ______________ ______________ ______________The terms of trade are changed from 2/10, net 30, to 3/10, net 30. ______________ ______________ ______________The terms are changed from 2/10, net 30, to 3/10, net 40. ______________ ______________ ______________The credit manager gets tough with past-due accounts. ______________ ______________ ______________arrow_forwardMifflin Company reported the following for the current year: Net sales Cost of goods sold Beginning balance in accounts receivable Ending balance in accounts receivable Compute (a) accounts receivable turnover and (b) days' sales uncollected. Hint. Accounts receivable turnover uses average accounts receivable, and days' sales uncollected uses the ending balance in accounts receivable. Accounts Receivable Turnover Compute the accounts receivable turnover. Complete this question by entering your answers in the tabs below. Days Sales Uncollected Numerator: " $ 62,700 41,000 1 1 14,600 6,300 Denominator: Accounts Receivable Turnover Accounts Receivable Turnover Accounts receivable turnover timesarrow_forward
- Mifflin Company reported the following for the current year: Net sales Cost of goods sold Beginning balance in accounts receivable Ending balance in accounts receivable Compute (a) accounts receivable turnover and (b) days' sales uncollected. Hint Accounts receivable turnover use receivable, and days' sales uncollected uses the ending balance in accounts receivable. Complete this question by entering your answers in the tabs below. Accounts Receivable Turnover Compute the days' sales uncollected. Days Sales Uncollected Numerator: 1 1 $ 62,700 41,000 14,600 6,300 Days' Sales Uncollected Denominator: xx Days = = = Days' Sales Uncollected Days' sales uncollected daysarrow_forwardA high accounts receivable turnover ratio indicates A. customers are making payments quickly. B. the firm's sales have increased. C. a large portion of the firm's sales are on credit. D. many customers are not paying their receivables...arrow_forwardUse the following financial statement information from Black Water Industries. BLACK WATER INDUSTRIES Ending Accounts Receivable Year Net Credit Sales 2017 $690,430 $335,250 2018 705,290 364,450 2019 770,500 406,650 A. Compute the accounts receivable turnover ratios for 2018 and 2019. Round your answers to two decimal places. 2018 times 2019 times B. Using the accounts receivable turnover, choose the statement that most closely describes the company's management of its receivables. a. The company's lending policies may be too strict. b. Collection efforts are not aggressive enough. There may be uncollectable receivables affecting the beginning and ending C. balances. d. All of the above statements may be correct. a b darrow_forward
- A high accounts receivable turnover indicates. a. customers are making payments quickly b. a large portion of the company's sales are on credit c. many customers are not paying their receiveables d. the comapany's sales have increasedarrow_forwardWhich of the following are ways companies could use accounts receivables for earnings management? Select all that apply. Overestimate uncollectibles to reduce earnings (cookie jar reserve) Underestimate uncollectibles to reduce earnings (cookie jar reserve) Underestimate uncollectibles to increase earnings Overestimate uncollectibles to increase earningsarrow_forwardThe following data are taken from the financial statements of Colby Company. Accounts receivable (net), end of year Net sales on account Terms for all sales are 1/10, n/45 Accounts Receivable turnover Average collection period (b) B I U T₂ T² Ix 2022 $550,000 4,300,000 2022 7.9 times lil 2021 What conclusions about the management of accounts receivable can be drawn from the accounts receivable turnover and the average collections period. € $540,000 4,000,000 2021 46.2 days 48.7 days 7.5 times W 144 144 들 3 99 = á T ¶₁arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College