Determine (a) the accounts receivable turnover and (b) the number of days' sales final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover 14.6 V b. Number of days' sales in receivables x days

Determine (a) the accounts receivable turnover and (b) the number of days' sales final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover 14.6 V b. Number of days' sales in receivables x days

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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Accounts Receivable Analysis
A company reports the following:
Sales
$1,460,000
Average accounts receivable (net)
100,000
Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and
final answers to one decimal place. Assume a 365-day year.
a. Accounts receivable turnover
14.6 V
b. Number of days' sales in receivables
x days
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Check My Work
a. Divide sales by average accounts receivable.
b. Divide average accounts receivable by average daily sales. Average daily sales are sales divided by 365 days.
a
N
acer

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