Question

An increase in sales discounts with no charge in average net accounts receivable will (increase, decrease,...

An increase in sales discounts with no charge in average net accounts receivable will (increase, decrease, have no effect on) receivables turnover.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Receivable Turnover = Net sale / Average Account Receivable

If there is no change in Account Receivable increase in sales discount will Decrease receivable Turnover.

Example:

Sale = $50000

Sales Discount = $5000

Net sale = $50000 - $5000 = $45000

Average Account receivable = $10000

Receivable turnover ratio = Net sale / Average Account receivable

= $45000 / $10000 = 4.5

Now,

Net sale = $50000

Sale discount increase by $5000 i.e. $10000

Net sale = $50000 - $10000 = $40000

Average Account Receivable = $10000

Receivable turnover ratio = $40000 / $10000 = 4

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
The Accounts Receivable Turnover is calculated by taking Net Sales and dividing it by Average Accounts...
The Accounts Receivable Turnover is calculated by taking Net Sales and dividing it by Average Accounts Receivable. Question: If a company wishes to improve its Accounts Receivable Turnover rate, which of the following would be the best strategy? Select one: a. Offer customers credit terms of 2/10, n/30 instead of terms 1/10, n/60 b. Increase its sales force c. Lower its selling prices d. Reduce the number of employees working in the Accounts Receivable department
Information follows for Carra Company: 1. The beginning-of-the-year Accounts Receivable balance was $25,000. 2. Net sales...
Information follows for Carra Company: 1. The beginning-of-the-year Accounts Receivable balance was $25,000. 2. Net sales for the year were $410,000. (Credit sales were $200,000 of the total sales.) Carra does not offer cash discounts. 3. Collections on accounts receivable during the year were $140,000. Required: (a) Prepare summary journal entries to record the items noted above. (b) Calculate Carra Company's accounts receivable turnover ratio for the year. How old is the average receivable in days? (c) Use the turnover...
XYZ Company has an accounts receivable turnover of 3.9 times and net sales of $3,436,812, calculate...
XYZ Company has an accounts receivable turnover of 3.9 times and net sales of $3,436,812, calculate the value of the accounts receivables.
11 A company has annual sales of $5,000,000 and its average daily accounts receivable is $370,000....
11 A company has annual sales of $5,000,000 and its average daily accounts receivable is $370,000. What is the average days' sales in receivables? Assume 365 days per year. HINT: compute first the accounts receivable turnover. Then, adjust that number based on the 265-day year to get the average days’ sales A               27.01                       B               16                              C               26                              d               18
The following data exists for Crane Company. 2022 2021 Accounts Receivable $84,000 $78,000 Net Sales 563,000...
The following data exists for Crane Company. 2022 2021 Accounts Receivable $84,000 $78,000 Net Sales 563,000 415,000 Calculate the accounts receivable turnover and the average collection period for accounts receivable in days for 2022. (Round answers to 1 decimal place, e.g. 15.2. Use 365 days for calculation.) Accounts receivable turnover Enter the accounts receivable turnover in times times Average collection period Enter the average collection period in days days
-Maxwell Corporation factored, with recourse, $100,000 of accounts receivable with HuskieFinancing. The finance charge is 3%,...
-Maxwell Corporation factored, with recourse, $100,000 of accounts receivable with HuskieFinancing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns,and sales allowances. Maxwell estimates the recourse obligation at $2,400. What amount shouldMaxwell report as a loss on sale of receivables?
Recent financial statements of Larkspur Ship Builders, Inc. report net sales of $668,500,000. Accounts receivable are...
Recent financial statements of Larkspur Ship Builders, Inc. report net sales of $668,500,000. Accounts receivable are $64,400,000 at the beginning of the year and $90,500,000 at the end of the year. (Round answers to 2 decimal places, e.g. 50.27. Use 365 days for calculation.) Compute Larkspur’s accounts receivable turnover. Accounts receivable turnover    times Compute Larkspur’s average collection period for accounts receivable in days. Average collection period for accounts receivable    days
A prominent divorce attorney group;  Ditcher, Quick and Hyde  has the following accounts receivable at different times    Accounts receivable...
A prominent divorce attorney group;  Ditcher, Quick and Hyde  has the following accounts receivable at different times    Accounts receivable turnover in days 42Compute the turnover per year The following year their accounts receivable turnoverper year was 12Compute the days  D,Q &H has gross receivables at the end of the year of$380,000 and net sales of $2,158,000Compute the days sales in receivables at the end of the year
Accounts receivable analysis The following data are taken from the financial statements of Sigmon Inc. Terms...
Accounts receivable analysis The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45.    20Y3 20Y2    20Y1 Accounts receivable, end of year $725,000 $660,000 $600,000 Sales on account 5,638,000 4,528,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a.) For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and...
The following data exists for Ivanhoe Company. 2022 2021 Accounts Receivable $85,000 $77,000 Net Sales 561,000...
The following data exists for Ivanhoe Company. 2022 2021 Accounts Receivable $85,000 $77,000 Net Sales 561,000 477,000 Calculate the accounts receivable turnover and the average collection period for accounts receivable in days for 2022. (Round answers to 1 decimal place, e.g. 15.2. Use 365 days for calculation.) Accounts receivable turnover times Average collection period days
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT