Table 3.2
Dana Dairy Products Key Ratios Income Statement
Dana Dairy Products
For the Year Ended December 31, 2013 Balance Sheet
Dana Dairy Products
December 31, 2013
-If Dana Dairy Products has credit terms which specify that accounts receivable should be paid in 25 days, the average collection period ________ since 2012. (See Table 3.2)
A) has deteriorated
B) has remained the same
C) has improved
D) cannot be determined

Question

Table 3.2
Dana Dairy Products Key Ratios  Income Statement
Dana Dairy Products
For the Year Ended December 31, 2013  Balance Sheet
Dana Dairy Products
December 31, 2013 
-If Dana Dairy Products has credit terms which specify that accounts receivable should be paid in 25 days, the average collection period ________ since 2012. (See Table 3.2)
A) has deteriorated 
B) has remained the same 
C) has improved 
D) cannot be determined

Quizplus · Accepted Answer

The average collection period has increased from 39 days in 2012 to 45 days in 2013. This means that it is taking longer for Dana Dairy Products to collect its accounts receivable, indicating a deterioration in the average collection period.

Table 3.2 Dana Dairy Products Key Ratios Income Statement