Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 9, Problem 8CDQ
To determine
Concept Introduction:
This is an efficiency ratio that indicates the conversion of the accounts receivable into cash. This ratio is calculated by dividing the Net credit Sales by the Average accounts receivable. The formula to calculate this ratio is as follows:
To Indicate:
If the accounts receivable turnover is satisfactory for the company.
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A company reports the following:
Sales
Average accounts receivable (net)
Determine (a) the accounts receivable turnover and (b) number of days' sales in receivables. Round your answers to one decimal place. Assume a 365-
day year.
a. Accounts receivable turnover
$398,580
76,650
b. Number of days' sales in receivables
days
A company computes its accounts receivable turnover to be 20. Based onthis information, find the average collection period. If the company has a credit collection period of 30 days, explain the relationship between thecredit collection period and the average collection period.
The net sale of a company is estimated to be SAR 384,000. How much will be the accounts receivable turnover ratio for the period if the average account receivables are SAR 32,000?
O a. 12
O b. 11
O c. 15
O d. 6
Chapter 9 Solutions
Survey of Accounting (Accounting I)
Ch. 9 - What type of analysis is indicated by the...Ch. 9 - Which of the following measures indicates the...Ch. 9 - Prob. 3SEQCh. 9 - Prob. 4SEQCh. 9 - Prob. 5SEQCh. 9 - That is the difference between horizontal and...Ch. 9 - Prob. 2CDQCh. 9 - Prob. 3CDQCh. 9 - Prob. 4CDQCh. 9 - How would the current and quick ratios of a...
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