The following information is taken from the adjusted trial balance of the Angie's Art Supply Company on 12/31/13: Angie's Art Supply offers all of its charge customers the credit terms, 2/10, n/30.
Required:
a) Compute accounts receivable turnover.
b) Compute the average number of days to collect accounts receivable.
c) Comment on the meaning of these ratios and specifically on how well this firm is managing its accounts receivable.

Question

The following information is taken from the adjusted trial balance of the Angie's Art Supply Company on 12/31/13:  Angie's Art Supply offers all of its charge customers the credit terms, 2/10, n/30.
Required:
a) Compute accounts receivable turnover.
b) Compute the average number of days to collect accounts receivable.
c) Comment on the meaning of these ratios and specifically on how well this firm is managing its accounts receivable.

Quizplus · Accepted Answer

The Answer of The following information is taken from the adjusted trial balance of the Angie's Art Supply Company on 12/31/13:  Angie's Art Supply offers all of its charge customers the credit terms, 2/10, n/30.
Required:
a) Compute accounts receivable turnover.
b) Compute the average number of days to collect accounts receivable.
c) Comment on the meaning of these ratios and specifically on how well this firm is managing its accounts receivable.

The Following Information Is Taken from the Adjusted Trial Balance