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If the accounts receivable turnover ratio is decreasing what will happen to the average collection period?
Avg Collection Period increases.
What relationship exists between the average collection period and accounts receivable turnover?
kjihihiiuhij
What information does the aging schedule for accounts receivable show that the average collection period may not?
The average collection period only shows how long it takes to collect your credit sales on average. The aging schedule shows your total accounts receivable, and the exact amounts that are owed in each time frame categories.
If the accounts receivable turnover ratio is decreasing accounts receivable will be on the books for a longer period of time?
180 days.
Who of the following accounts would be closed at the end of the accounting period?
Accounts receivable
If the accounts receivable turnover ratio is decreasing what will happen to the average collection period?
Avg Collection Period increases.
What relationship exists between the average collection period and accounts receivable turnover?
kjihihiiuhij
How do you calculate collection period?
Oh, dude, calculating the collection period is like measuring how long it takes for a company to collect its accounts receivable. You just divide the average accounts receivable by the net credit sales and boom, you've got your collection period. It's not rocket science, just basic math with a fancy name.
What information does the aging schedule for accounts receivable show that the average collection period may not?
The average collection period only shows how long it takes to collect your credit sales on average. The aging schedule shows your total accounts receivable, and the exact amounts that are owed in each time frame categories.
If the accounts receivable turnover ratio is decreasing accounts receivable will be on the books for a longer period of time?
180 days.
Who of the following accounts would be closed at the end of the accounting period?
Accounts receivable
ABC Company has an average collection period of 60 days Total credit sales for the year were 3000000 What is the balance in accounts receivable at year-end?
$500,000
What does an accounts receivable rate of 9 mean?
An accounts receivable rate of 9 typically indicates that, on average, a company collects its outstanding receivables nine times during a specific period, usually a year. This metric is calculated by dividing the total credit sales by the average accounts receivable. A higher rate suggests efficient collection processes and effective credit management, while a lower rate may indicate potential issues with cash flow or collection efforts.
What are three quantitative measures that can be applied to the collection policy of the firm?
a. Average collection period = Accounts receivable/Average daily credit sales An increase in the average collection period may be the result of a predetermined plan to expand credit terms or the consequence of poor credit administration. b. Ratio of bad debts to credit sales. An increasing ratio may indicate too many weak accounts or an aggressive market expansion policy. c. Aging of accounts receivable. Aging of accounts receivable is one way of finding out if customers are paying their bills within the time prescribed in the credit terms. If there is a buildup in receivables beyond normal credit terms, cash inflows will suffer and more stringent credit terms and collection procedures may have to be implemented.
Is installment accounts receivable and aging of accounts receivable the same thing?
Installment Accounts Receivable means that a customer agree to pay on monthly basis over a period of time will make "installments" that is going to be debited to the A/RAging Schedule of accounts receivable, is the behavior of the Accounts Receivable over the time from when the accounts are on; due date, 30 days, 60 days, 90 days, 2 years, etc. you can measure how much time takes to collect your A/R.They are similar concepts but are not the same
A firm has sales of 1.2 million and 10 percent of the sales are for cash. The year-end accounts receivable balance is 180000. What is the average collection period using 360 day year.?
average collection period= accounts receivable/daily credit sales %10 of 1.2 million = 120000 = sales for cash 1.2m-120000=1.080000=sales on credit ( divide by 360 to find daily credit sales) ACP=180000/(1080000/360)= 60 days
A firm has sales of 1.2 million and 10 percent of the sales are for cash The year-end accounts receivable balance is 180000 What is the average collection period using 360 day year?
average collection period= accounts receivable/daily credit sales %10 of 1.2 million = 120000 = sales for cash 1.2m-120000=1.080000=sales on credit ( divide by 360 to find daily credit sales) ACP=180000/(1080000/360)= 60 days
