The average time for a company’s accounts receivable to be collected. See days sales in accounts receivable.
The average time for a company’s accounts receivable to be collected. See days sales in accounts receivable.
Same as the Days Sales in Accounts Receivable
. The monitoring of the average collection period is one way to track a company’s ability to collect its accounts receivable. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance...
What is the accounts receivable collection period? Definition of Accounts Receivable Collection Period The accounts receivable collection period is similar to the days sales outstanding or the days sales in accounts...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
the average based on the average throughout the year. Average Collection Period or Days’ Sales in Receivables The average collection period tells how many days (on average) it takes to collect a company’s accounts...
is the sum of the following: the days’ sales in inventory (365 days/inventory turnover ratio), plus the average collection period (365 days/accounts receivable turnover ratio) The operating cycle has...
What is the days' sales in accounts receivable ratio? Definition of Days’ Sales in Accounts Receivable The days’ sales in accounts receivable ratio (also known as the average collection period) tells you the...
increases each month of the year. The cost of goods sold was a constant 70% of sales. The balance in accounts receivable was $40,000 at the start of the year and $60,000 at the end of the year. The balance in inventory...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
inventory turnover ratio for the year? Select... Less than 4 times 4 times 5 times More than 5 times 15. The combination of the average collection period and the days’ sales in inventory is the company’s __________....
receivable This procedure sorts the amounts owed to a company by its customers and by the dates when the sales invoices are or were due. Mark as wrong Mark as right average collection period (or) days' sales in...
and amounted to $800,000 for the year. Which of the following is closest to the company’s average collection period for the year? Select... 12 days 30 days 45 days View Coaching The average collection period is also...
receivable turnover ratio (or receivables turnover ratio) Average collection period (or days’ sales in accounts receivable) The accounts receivable turnover ratio is calculated by dividing a company’s net credit...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
ratio This ratio results when total credit sales for a year are divided by the average amount of accounts receivable during the year. Mark as wrong Mark as right days' sales in accounts receivable (or) average...
__________ by the average amount of its net fixed assets during the year. 29. The accounts receivable collection period is similar to the days’ __________ in accounts receivable. 30. The return on assets and the...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
's average collection period for the year was __________ 28 Days' sales in receivables = 360 or 365 / accounts receivable turnover ratio = 360 / 13 = 27.69 = 28 days when rounded, or 365 / 13 =...
The most common example is the correction of an error from a prior year. When such a correction is made, it is reported in the current period’s statement of retained earnings rather than in the current...
An amount that should be charged to the current accounting period as an expense.
The number of years needed to recover the cash amount invested in a project. The calculation uses cash flows rather than accounting income flows. Generally the cash flows are not discounted to reflect the time value of...
Also known as the periodicity assumption. The accounting guideline that allows the accountant to divide up the complex, ongoing activities of a business into periods of a year, quarter, month, week, etc. The precise time...
What is an accounting period? Definition of Accounting Period An accounting period is the period of time covered by a company’s financial statements. Common accounting periods for external financial statements include...
What are the limitations of the payback period? Definition of Payback Period The payback period is a common (but not the best) tool for screening a company’s potential investments. It uses the potential investment’s...
See time period assumption.
How are period costs reported in the financial statements? Under the accrual method of accounting, period costs such as selling, general and administrative expenses are reported on the income statement in the accounting...
How do you calculate the payback period? Definition of Payback Period The payback period is the expected number of years it will take for a company to recoup the cash it invested in a project. Examples of Payback Periods...
Is rent expense a period cost or a product cost? Definition of Rent Expense Rent expense is often a monthly amount paid by a company for use of a building. Typically, the rent is due on the first day of every month that...
What are net incremental cash flows? Net incremental cash flows are the combination of the cash inflows and the cash outflows occurring in the same time period, and between two alternatives. For example, a company could...
Contributions collected by Charity #1 who is merely acting as a collection agent for Charity #2. Also known as flow-through contributions.
The collection of money (currency, coins, checks). Not to be confused with revenues.
One of the cost flow assumptions associated with the periodic inventory system. The first (oldest) costs are removed from inventory first and are charged to the income statement as cost of goods sold. The recent costs...
The system where the general ledger account Inventory is not updated during the year. Rather, the merchandise purchased is recorded in temporary purchases accounts. At the time a balance sheet is presented, the inventory...
A weighted average cost used with the periodic inventory system. To learn more, see Explanation of Inventory and Cost of Goods Sold.
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