Accounts receivable turnover Average collection period times days
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
 alt="The following information is available for Carla Vista Products:
Accounts receivable
Cost of goods sold
Inventory (ending)
Net cash provided by operating activities
Net sales
Capital expenditures
Dividends
Accounts receivable turnover
2014
Average collection period
$70,800
623,040
61,360
259,600
1,067,310
47,200
28,674
2013
$87,320
684,400
days
80,240
200,600
1,109,200
Compute the following for 2014: (Round answers to 1 decimal place, e.g. 52.7. Use 365 days for calculation.)
44,840
37,760
times
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