Question: To increase its sales a company decides to increase its
To increase its sales, a company decides to increase its credit terms from 15 to 30 days. What effect will this change in policy have on receivables turnover and days’ sales uncollected?
Answer to relevant QuestionsHow might the receivables turnover and days’ sales uncollected reveal that management is consistently underestimating the amount of losses from uncollectible accounts? Is this action ethical?Chicago Corporation, which uses the allowance method, has accounts receivable of $25,400 and an allowance for uncollectible accounts of $4,900. An account receivable from Tom Novak of $2,200 is deemed to be uncollectible and ...At the beginning of 2014, the balances for Accounts Receivable and Allowance for Uncollectible Accounts were $215,000 and $15,700 (credit), respectively. During the year, credit sales were $1,600,000 and collections on ...Techno Designs Store uses the accounts receivable aging method to estimate uncollectible accounts. On February 1, 2014, the balance of the Accounts Receivable account was a debit of $442,341, and the balance of Allowance for ...Mullin Interiors, a successful retailer of high-quality furniture, is located in an affluent suburb where a large insurance company has just announced that it will lay off 4,000 employees. Because most of Mullin Interiors’ ...
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