Axis Wells and Excavation (AWE) currently generates $72,000 in annual credit sales. AWE sells on terms of

Question:

Axis Wells and Excavation (AWE) currently generates $72,000 in annual credit sales. AWE sells on terms of net 50, and its accounts receivable balance averages $12,000. AWE is considering a new credit policy with terms of net 25. Under the new policy, sales will decrease to $68,000, and accounts receivable will average $13,600. Compute the days sales outstanding (DSO) under the existing policy and the proposed policy.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

Fantastic news! We've Found the answer you've been seeking!