FINANCIAL ACCOUNTING: TOOLS FOR BUSINES
FINANCIAL ACCOUNTING: TOOLS FOR BUSINES
9th Edition
ISBN: 9781119595649
Author: Kimmel
Publisher: WILEY
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Chapter 8, Problem 21Q
To determine

Introduction

Incorporation T’s sales has been increased by 50%, as a result of hiring a new sales director. However, Incorporation T’s CEO notified that the average collection period of receivables also been increased from 17 days to 38 days.

Average collection period:

Average collection period indicates the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average.

To describe: The cause of increase in average collection period, and its implications to management.

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