Select financial information from Beca Inc. is shown below: Receivables less allowance for doubtful accounts Receivables, net Credit sales Receivables Turnover Ratio 2018 Average Collection Period $425,795 45,485 380,310 5,154,400 2017 $371,727 32,469 339,258 Calculate the receivables turnover and the collection period for 2018. (Round answers to 1 decimal place, e.g. 12.3.) 4,833,400 times days
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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.
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