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Accounts receivable turnover is computed by dividing sales revenue by average accounts receivable over a certain period. It gauges a company's effectiveness in extending credit and collecting debts. Higher values of this figure indicate a more proficient collections department and credit policy.
The accounts receivable turnover is a measure used in financial accounting to quantify a firm's effectiveness in extending credit and collecting debts. The formula to calculate this key figure involves the sales revenue divided by the average accounts receivable during a certain period. More specifically, it is computed as Net Credit Sales / Average Accounts Receivable. It's a key indicator of a company's short-term liquidity, with higher values indicating that the business has a more proficient collections department and credit policies.
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Final answer:
The Accounts Receivable Turnover is computed by dividing Sales by Average Accounts Receivable. It shows how quickly a firm collects on its credit sales.
Explanation:
The Accounts Receivable Turnover is a measure used to quantify a firm's effectiveness in extending credit and collecting debts. It is computed by dividing Sales by Average Accounts Receivable. This formula indicates how quickly a company collects on its credit sales.An accrued expense best describes an amount not paid and currently matched with earnings. In business accounting, accrued expenses are those expenses that have been incurred, but not yet paid. These are calculated and recognized in the books, even if the payment hasn't been made. That is why they are also matched with earnings. An example might be wages for employees that have been earned but not yet paid out. Therefore, the correct answer is A. Not paid and currently matched with earnings.For example, if a company has total sales of $100,000 and its average accounts receivable is $20,000, the Accounts Receivable Turnover would be 5 ($100,000 / $20,000). This means the company collects its average receivable 5 times in a given year.
An accrued expense best describes an amount not paid and currently matched with earnings. In business accounting, accrued expenses are those expenses that have been incurred, but not yet paid. These are calculated and recognized in the books, even if the payment hasn't been made. That is why they are also matched with earnings. An example might be wages for employees that have been earned but not yet paid out. Therefore, the correct answer is A. Not paid and currently matched with earnings.
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Related Questions
Sunland Company uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2020 was $277000. The balance in the same account at the end of 2021 is $419000. Sunland’s Cost of Goods Sold account has a balance of $2110000 from sales transactions recorded during the year. What amount should Sunland report as Cost of Goods Sold in the 2021 income statement?
For fiscal year 2016, Nancy calculated the following costs for Choco-rama’s manufacturing process. Beginning work in process inventory, $22,655 Ending work in process inventory, $28,207 Beginning raw materials inventory, $42,385 Ending raw materials inventory, $44,299 Raw materials purchased, $387,521 Office supplies purchased and used, $15,274 388,400 man-hours of factory labor incurred at $23.60/hour 14,200 man-hours of factory oversight labor incurred at $28.75/hour Administrative salaries, $392,000 Factory utilities, $18,500 Factory depreciation, $9,700 Factory repairs, $15,400
VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT Corporation; credit terms were 2 / 10, n / 30. VLC paid the outgoing freight charge of $10. PRT paid the invoice within the discount period.The entries in VLC's accounting information system to record all the preceding events will include all of the following except: A. A debit to cost of goods sold B. A debit to delivery expense C. A credit togross profit D. A credit to inventory
Assignment I1. On March 1, 2020, Tahir Muktar, a famous businessman in Addis, opened a business named “Universal Garage” which is organized as a sole proprietorship. The business is established to render car repair, maintenance and related services for fees. Below are chart of accounts for and selected transactions completed by Universal Garage in March 2020.a) Chart of accounts Universal GarageChart of Accounts100 ASSETS 110 CURRENT ASSETS 111 Cash 112 Accounts Receivable 114 Supplies 116 Prepaid Rent 117 Prepaid Insurance 120 PLANT ASSETS 121 Land 123 Machinery 123.1 Accumulated Depreciation-Machinery 125 Office Equipment 0.1 Accumulated Depreciation-Office Equipment200 LIABILITIES 210 CURRENT LIABILITIES 211 Account Payable 213 Salaries Payable 216 Interest Payable 220 NON-CURRENT LIABILITIES 221 Long-term Bank Loan 300 OWNER'S EQUITY 301 Tahir, Capital 302 Tahir, Drawings 303 Incomes Summary 400 REVENUES 401 Fees Earned 410 Other Income 500 EXPENSES 501 Salary Expenses 502 Supplies Expenses 503 Rent Expenses 504 Insurance Expenses 505 Depreciation Expenses 506 Interest Expenses 510 Miscellaneous Expenses b) TransactionsMar 1 Received the following assets from its owner, Tahir: Cash....................................... Br, 8,300 Supplies ................................. 2,000 Office Equipment................... 10,000 2 Borrowed Br 5,000 from Dashen Bank 3 Paid Br 1,800 for rent on a building leased for business purposes 3 Purchased welding and other repair machinery for Br 3,600 cash 4 Paid Br 200 for a radio advertisement 8 Sold for Br 200 cash an old office equipment with a recorded cost of Br 200 13 Paid weekly salary Br 1,200 16 Received Br 4,400 from services rendered on cash 20 Paid weekly salary Br 1,200 20 Received Br500 royalties for idle repair machinery it leased to other businesses 20 Delivered service on credit, Br 6,00021 Purchased additional repair machinery on account for Br 2,000 from Sámi-Engineers 23 Received Br 5,000 additional cash investment from its owner 24 Repaid Br 1,000 bank loan and paid Br 100 interest on bank loan 26 Purchased supplies for Br 800 cash 27 Paid Br 100 for customer entertainment and other items27 Paid weekly salary Br 1,200 31 Paid Br 500 for electricity and other utilities consumed during the month 31 Received Br 4,200 cash from credit customers 31 Paid Tahir Br 1,800 for personal uses Required: a) Journalize the above transactions in a two-column journal b) Post the journal entries to “T” accounts c) Prepare and complete a worksheet based on the following additional information i. Cost of supplies remained unconsumed on Mar 31 is Br 900 ii. The amount paid on Mar 3 is for a three-month rent iii. The amounts of depreciation for machinery and office equipment are estimated to be Br 560 and Br 1,900 respectively iv. Universal Garage usually pays Br 1,200 for employee's salary every saturday for a six-day work week ended on that day v. Interest on bank loan accrued but not paid on March 31 total Br 100 d) Prepare financial statements for the month e) Journalize and post adjusting entries f) Journalize and post closing entries g) Prepare post-closing trial balance
Check all that apply.
An asset account increases. An asset account decreases.
A liability account increases. A liability account decreases.
Capital Stock increases. Capital Stock decreases.
Retained Earnings increase. Retained Earnings decrease.
Answers
Answer:
Asset Account is decreased.
Liability Account is also decreased.
No effects on Capital Stock.
No effects on Retained Earnings.
Explanation:
Asset Account is decreased by $5000 because Cash is paid for the purchases made on account last month.
Liability Account is decreased by $5000 because accounts payable for the purchases made In the last month is now paid.
This transaction will have no effects on Capital Stock Account and Retained Earnings Account.
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Answer:
1)They would prefer to make shorts as contribution margin per unit is higher for shorts
Explanation:
Step 1. Given information.
- Sales price shirts is $24
- Variable costs shirts is $10
- Sales price shorts $32
- Variable costs shorts $17
Step 2. Formulas needed to solve the exercise
Contribution margin = sales price - variable cost
Step 3. Calculation.
Contribution margin shirts = 24 - 10 = 14
Contribution margin shorts = 32 - 17 = 15
Step 4. Solution.
Contribution margin shorts > Contribution margin shirts
b. Compute the multifactor productivity figures for labor and capital together. (Round your answers to 2 decimal places.)
c. Calculate raw material productivity figures (units/$ where $1
Answers
Answer:
Part A:
Labur Productivity:
For US=5.14, LDC=1.35
Capital Productivity:
For US=1.72 LDC=4.31
Part B:(Multi factor productivity)
For US=1.29 LDC=1.03
Part C: (Raw material productivity)
For US=4.90 LDC=10.02
Explanation:
Part A:
Labur Productivity:
For US:
For LDC:
Capital Productivity:
For US:
For LDC:
Part B:
For US:
For LDC:
Part C:
For US:
ForLDC:
Converting Raw material FC into $ (1$=10FC)
Raw Material =19550/10=$1955
Answers
Answer:
Varga should recognize $4,000 as revenue in 2016.
Explanation:
As the cash received in advance is recorded as unearned revenue which is a liability for the Varga Tech Services because they did not provide the services yet. On December 31, Eight months have passed and services for these month has been provided. So the revenue of 8 month months of 2016 will be recognized and recorded at year end.
Serive Contract = $6,000 for 12 months
Revenue Recognized in 2016 = $6,000 x 8/12 = $4,000
b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond.
c. Should you purchase the bond?
Answers
Answer:
A) YTM 7.06%
B) $847.8784
C) No I will not as it is overpriced.
Explanation:
A) the yield to maturity is calculate as the rate at which the present value of the coupon payment and maturity equals the market price.
It is done by approximation or using excel or financial calculator.
YTM using goal seek excel: 0.070630268 = 7.06%
Using this rate rounded:
Present value of the coupon payment.
C: 1,000 x 8% = $ 80.00
time 15 years
YTM: 0.076
PV $725.8798
Maturity: $1,000
time 15 years
YTM: 0.076
PV 359.41
PV coupon $725.8798 + PV maturity $359.4110 = $1,085.2909
B) Present value of the bond at comparable-risk YTM:
C: 1,000 x 8% = $ 80.00
time 15 years
comparable risk rate: 0.1
PV $608.4864
Maturity $ 1,000.00
time 15 years
comparable risk rate: 0.1
PV 239.39
PV coupon $608.4864 + PV market $239.3920 = $847.8784
I will not purchase as it is overvalued:
1,085 - 847.88= 237.12
Final answer:
a. The bond's yield to maturity is 8.46%. b. The value of the bond to you is $800. c. It may not be a good investment to purchase the bond.
Explanation:
a. To compute the bond's yield to maturity, we can use the formula: Yield to Maturity = (Annual Interest Payment + (Face Value - Current Price) / Number of Years) / ((Face Value + Current Price) / 2). Plug in the values we have: Annual Interest Payment = $1,000 * 8% = $80, Face Value = $1,000, Current Price = $1,085, Number of Years = 15. Yield to Maturity = ($80 + ($1,000 - $1,085) / 15) / (($1,000 + $1,085) / 2) = 8.46%.
b. To determine the value of the bond to you, we can use the formula: Value of Bond = Annual Interest Payment / Yield to Maturity. Plug in the values we have: Annual Interest Payment = $80, Yield to Maturity = 10%. Value of Bond = $80 / 10% = $800.
c. Should you purchase the bond? Since the current market price of the bond is higher than the value of the bond to you, it may not be a good investment. You would be paying more than the bond's actual value, which would lower your potential return on investment.
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Answers
Answer:
The advertising business could use Sarah's template and give it to her colleagues and sell it out to everyone.
Explanation:
She can then use the other templates for a later date and make it availbale to her colleagues whenever they need it.
A: creating a custom template