Connect Access Card for Fundamental Accounting Principles
Connect Access Card for Fundamental Accounting Principles
23rd Edition
ISBN: 9781259693878
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 17, Problem 8DQ
To determine

Accounts Receivable Turnover:

The liquidity measures which measures the efficiency is collecting the accounts receivable is called accounts receivable turnover ratio. It is computed by dividing the Net credit sales by the average accounts receivable of the company.

To determine:

What does a relatively high accounts receivable turnover indicate about a company’s short-term liquidity?

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If an inventory is updated perpetually, which of the equations is correct? A. Cost of goods sold = Beginning inventory - Purchases - Ending inventory B. Cost of goods sold = Beginning inventory + Purchases + Ending inventory C. Ending inventory = Beginning inventory + Purchases - Cost of goods sold D. Ending inventory = Beginning inventory + Purchases + Cost of goods sold
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Connect Access Card for Fundamental Accounting Principles

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