Question

Accounts Receivable Turnover and Days' Sales in Receivables Quasar, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. Quasar reported the following data for two recent years: Year 2 Year 1 Sales $3,831,040 $3,798,190 Accounts receivable 306,600 292,000 Assume that accounts receivable were $335,800 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place. Year 2: Year 1: b. Compute the days' sales in receivables for Year 2 and Year 1. Round interim calculations and final answers to one decimal place. Use 365 days per year in your calculations. Year 2: days Year 1: days c. The change in accounts receivable turnover from year 1 to year 2 indicates a(n) in the efficiency of collecting accounts receivable and is a(n) change. The change in the days' sales in receivables indicates a(n) change.

Answer 1

The change in accounts receivable turnover from year 1 to year 2 indicates a(n) increase in the efficiency of collecting accounts receivable and is a(n) favourable change. The change in the days sales in receivables indicated a(n) favourable change.