Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 8, Problem 8MC
- 8. If the receivables turnover ratio decreased during the year.
- a. The days to collect also decreased.
- b. Receivables collections slowed down.
- c. Sales Revenues increased at a faster rate than
Accounts Receivable increased. - d. None of the above.
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Students have asked these similar questions
What relationship exists between the average collection period and accounts receivable turnover?
Select one:
a. There is a direct and proportional relationship.
b. Both ratios are expressed in number of days.
c. As average collection period increases (decreases) the accounts receivable turnover decreases (increases).
d. Both ratios are expressed in number of times receivables are collected per year.
What is a meaning of decrease in accounts receivable of $16,000 for the year ?
When analyzing financial statements, what can you conclude when the accounts receivable turnover ratio decreases from 9.0 to 6.0 over a three year period.
Group of answer choices
None of the above
b. The collection period has increased over time
a. Collections are within standard terms
c. The collection period has decreased over time
Chapter 8 Solutions
Fundamentals Of Financial Accounting
Ch. 8 - What are the advantages and disadvantages of...Ch. 8 - Prob. 2QCh. 8 - Which basic accounting principles does the...Ch. 8 - Using the allowance method, is Bad Debt Expense...Ch. 8 - What is the effect of the write-off of...Ch. 8 - How does the use of calculated estimates differ...Ch. 8 - A local phone company had a customer who rang up...Ch. 8 - What is the primary difference between accounts...Ch. 8 - What are the three components of the interest...Ch. 8 - As of May 1, 2016, Krispy Kreme Doughnuts had...
Ch. 8 - Does an increase in the receivables turnover ratio...Ch. 8 - What two approaches can managers take to speed up...Ch. 8 - When customers experience economic difficulties,...Ch. 8 - (Supplement 8A) Describe how (and when) the direct...Ch. 8 - (Supplement 8A) Refer to question 7. What amounts...Ch. 8 - 1. When a company using the allowance method...Ch. 8 - 2. When using the allowance method, as Bad Debt...Ch. 8 - 3. For many years, Carefree Company has estimated...Ch. 8 - 4. Which of the following best describes the...Ch. 8 - 5. If the Allowance for Doubtful Accounts opened...Ch. 8 - 6. When an account receivable is recovered a....Ch. 8 - Prob. 7MCCh. 8 - 8. If the receivables turnover ratio decreased...Ch. 8 - Prob. 9MCCh. 8 - Prob. 10MCCh. 8 - Prob. 1MECh. 8 - Evaluating the Decision to Extend Credit Last...Ch. 8 - Reporting Accounts Receivable and Recording...Ch. 8 - Recording Recoveries Using the Allowance Method...Ch. 8 - Recording Write-Offs and Bad Debt Expense Using...Ch. 8 - Determining Financial Statement Effects of...Ch. 8 - Estimating Bad Debts Using the Percentage of...Ch. 8 - Estimating Bad Debts Using the Aging Method Assume...Ch. 8 - Recording Bad Debt Estimates Using the Two...Ch. 8 - Prob. 10MECh. 8 - Prob. 11MECh. 8 - Recording Note Receivable Transactions RecRoom...Ch. 8 - Prob. 13MECh. 8 - Determining the Effects of Credit Policy Changes...Ch. 8 - Prob. 15MECh. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Bad Debt Expense Estimates and...Ch. 8 - Determining Financial Statement Effects of Bad...Ch. 8 - Prob. 3ECh. 8 - Recording Write-Offs and Recoveries Prior to...Ch. 8 - Prob. 5ECh. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Recording and Reporting Allowance for Doubtful...Ch. 8 - Recording and Determining the Effects of Write-Off...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Using Financial Statement Disclosures to Infer...Ch. 8 - Using Financial Statement Disclosures to Infer Bad...Ch. 8 - Prob. 15ECh. 8 - Analyzing and Interpreting Receivables Turnover...Ch. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions Jung ...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions CS...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Prob. 2PBCh. 8 - Prob. 3PBCh. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording and Reporting Credit Sales and Bad Debts...Ch. 8 - Prob. 2COPCh. 8 - Recording Daily and Adjusting Entries Using FIFO...Ch. 8 - Prob. 1SDCCh. 8 - Prob. 2SDCCh. 8 - Ethical Decision Making: A Real-Life Example You...Ch. 8 - Critical Thinking: Analyzing the Impact of Credit...Ch. 8 - Using an Aging Schedule to Estimate Bad Debts and...Ch. 8 - Accounting for Receivables and Uncollectible...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 6. Michaels Corp. has a current accounts receivable balance of $623,410. Credit sales for the year just ended were $5,410,695. What is the receivables turnover? The days’ sales in receivables? How long did it take on average for credit customers to pay off their accounts during the past year?arrow_forward1. What is the correct accounts receivable – trade account balance? 2. What is the carrying value of the accounts receivable –trade? 3. What is the correct bad debt expense for the year assuming that the allowance for bad debts based on aging of trade receivables at the beginning of the year was at P5,400?arrow_forward4.-Which of the following changes in credit standards and terms would cause a decrease in profit? A) Decrease in customers taking advantage of the discount. B) Increase in average collection period days. C) Increase in units sold. D) Decrease in the % of uncollectible accounts.arrow_forward
- Days' sales in receivables a.measures the number of times the receivables turn over each year b.is an estimate of the length of time the receivables have been outstanding c.is credit sales divided by average receivables d.is not meaningful and therefore is not usedarrow_forwardImagine that you are the financial analyst for XYZ Company. The organization is trying to determine why the collection of accounts receivable accounts has decreased by 30% over the last three months of this year. Would you utilize horizontal or vertical analysis to determine the decrease in account receivable collection? Explain your answerarrow_forwardthe best sentence reflect the decrease in trade receivables balance at the end of the year : إختر أحد الخيارات: a. decrease the current ratio b. decrease the quick ratio. c. increase the current ratio and quick ratio d. decrease the current ratio and quick ratio.arrow_forward
- An auditor’s preliminary analysis of accounts receivable turnover revealed thefollowing rates over these accounting periods2013 2012 20114.3 6.2 7.3Which of the following is the most likely cause of the decrease in accounts receivableturnover?(1) Increase in the cash discount offered(2) Liberalization of credit policy(3) Shortening of due date terms(4) Increased cash salesarrow_forwardCalculating the Average Collection Period [LO2] Ortiz Lumber Yard has acurrent accounts receivable balance of $431,287. Credit sales for the year justended were $3,943,709. What is the receivables turnover? The days’ sales inreceivables? How long did it take on average for credit customers to pay off theiraccounts during the past year?arrow_forwardFirm A had no credit losses last year, but 1% of Firm Bs accounts receivable proved to be uncollectible and resulted in losses. Can you determine which firms credit manager is performing better? Why or why not?arrow_forward
- Which of the following reasons should not be considered in order to explain why the receivables appear to be abnormally high? a. Sales volume expanded materially late in the year. b. Material amount of receivables are on the installment basis. c. Receivables have collectability problems and possibly some should have been written off d.Sales volume decreases materially late in the year.arrow_forwardWhich of the following would best explain an increase in receivables turnover? a. The company adopted new credit policies last year and began offering credit to customers with weak credit histories. b. Due to problems with an error in its old credit scoring system, the company had accumulated a substantial amount of uncollectible accounts and wrote off a large amount of its receivables. c. To match the terms offered by its closest competitor, the company adopted new payment terms now requiring net payment within 30 days rather than 15 days, which had been its previous requirement.arrow_forward1. As a result of the changes in collection procedures, average accounts receivable balance will increase or (decrease) by a. (900,000) b. 90,000 c. 900,000 d. 32,400,000 2. To make the changes in collection procedures cost beneficial, the minimum savings in collection costs for the coming year should be a. 8,100 b. 81,000 c. 90,000 d. 900,000arrow_forward
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