Question

An analyst observed a decrease in a company’s days in sales outstanding (DSO). Which of the...

An analyst observed a decrease in a company’s days in sales outstanding (DSO). Which of the following could explain this trend?

A. The company agreed on more lenient credit terms with its suppliers.

B. Due to a general economic downturn, customers needed to delay payments to the company

C. The company increased the allowance for doubtful accounts this year.

D. The company adopted more lenient credit terms for its customers

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Option (D) is correct.

Explanation:- Company makes the credit policy for Creditor(Accounts receivable that shown the outstanding amount of credit sales) . In policy, company estimate the Days of recovery amount that are due on customer in form of account receivable which occurred by Credit sales. If company needs early recovery of receivable , it provides the certain discount if receivable pay the amount before Estimated days . Through this lenient credit terms for its customers ,campany able to recover the outstanding balance before the Estimated outstanding days.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An analyst observed a decrease in a company’s days in sales outstanding (DSO). Which of the...
An analyst observed a decrease in a company’s days in sales outstanding (DSO). Which of the following could explain this trend? A. The company agreed on more lenient credit terms with its suppliers. B. Due to a general economic downturn, customers needed to delay payments to the company C. The company increased the allowance for doubtful accounts this year. D. The company adopted more lenient credit terms for its customers
Question 3 An analyst is comparing two pharmaceutical companies, Abraham Inc. and Branson Corporation. Both companies...
Question 3 An analyst is comparing two pharmaceutical companies, Abraham Inc. and Branson Corporation. Both companies follow the US GAAP with a fiscal year ending on 31 December. They released their first new drugs around the same time early this year. Branson developed its drug internally, whereas Abraham acquired the research and development for its drug from another company. All else equal, Branson compared to Abraham would most likely report in the current year A. similar net cash from investing...
Ingraham Inc. currently has $915,000 in accounts receivable, and its days sales outstanding (DSO) is 45...
Ingraham Inc. currently has $915,000 in accounts receivable, and its days sales outstanding (DSO) is 45 days. It wants to reduce its DSO to 20 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 25%. What will be the level of accounts receivable following the change? Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.
Ingraham Inc. currently has $425,000 in accounts receivable, and its days sales outstanding (DSO) is 65...
Ingraham Inc. currently has $425,000 in accounts receivable, and its days sales outstanding (DSO) is 65 days. It wants to reduce its DSO to 30 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 15%. What will be the level of accounts receivable following the change? Assume a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.
Question 2 Reported expenses are most likely to have been understated with management’s discretionary ________ A....
Question 2 Reported expenses are most likely to have been understated with management’s discretionary ________ A. increase in doubtful accounts   B. decrease in warranty provisions   C. increase in the interest earned on credit sales D. acceleration in revenue recognition. Question 3 An analyst is comparing two pharmaceutical companies, Abraham Inc. and Branson Corporation. Both companies follow the US GAAP with a fiscal year ending on 31 December. They released their first new drugs around the same time early this year....
Which of the following statements are CORRECT? If a firm takes actions that increase its days...
Which of the following statements are CORRECT? If a firm takes actions that increase its days sales outstanding (DSO), then, other things held constant, this will shorten its cash conversion cycle (CCC). Other things held constant, if a firm "stretches" (i.e., delays paying) its accounts payable, this will lengthen its CCC. Other things held constant, adopting a new manufacturing process that speeds up the conversion of raw materials to finished goods from 20 days to 10 days will lengthen the...
Jarden Company has credit sales of $3,000,000 for year 2017. On December 31, 2017, the company’s...
Jarden Company has credit sales of $3,000,000 for year 2017. On December 31, 2017, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of $18,424. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here. December 31, 2017 Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible $ 600,000 Not...
Which of the following statements is CORRECT? Select one: a. The days sales outstanding ratio tells...
Which of the following statements is CORRECT? Select one: a. The days sales outstanding ratio tells us how long it takes, on average, to collect after a sale is made. The account collection period (ACP) can be compared with the firm's credit terms to get an idea of whether customers are paying on time. Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-assets ratio was 67.5%....
Use the following information to answer the next two questions.   X-ray Inc. is a small manufacturing...
Use the following information to answer the next two questions.   X-ray Inc. is a small manufacturing company. Currently, X-ray extends credit to its customers on a net 45 basis, but the company is having an issue with collecting payments in a timely manner. Currently, X-ray's customers pay 90 days (n=90) after being invoiced. X-ray is currently contemplating giving customers a 5% discount if they pay within 20 days of the invoice date. Currently, the average invoice amount is $12,000, but...
Which of the following statements is CORRECT? a. In general, it's better to have a low...
Which of the following statements is CORRECT? a. In general, it's better to have a low inventory turnover ratio than a high one, as a low one indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock. b. The more conservative a firm's management is, the higher the firm's total debt to total capital ratio is likely to be. c. A decline in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT