7. Accounts receivable analysis Aa Aa Accounts receivable analysis assesses a company's credit policy and...
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7. Accounts receivable analysis Aa Aa Accounts receivable analysis assesses a company's credit policy and its ability to collect its accounts receivable. When a company collects receivables, it receives cash from customers for sales made on account. Therefore, if the company is efficient at collecting its receivables, it will improve the company's cash position. In addition, credit policies that encourage quick collection of receivables also reduce the risk of uncollectible accounts. Which accounts receivable measure directly indicates how much more sales revenue a company generates relative to its average accounts receivable balance? o Accounts receivable turnover O Number of days' sales in receivables Selected financial data for Moore Corp. over the last two years are shown. Moore Corp. Selected Financial Data For the Years Ended December 31, 2013 and 2012 2013 2012 Net sales $3,830,310 $3,016,725 Accounts receivable (net): Beginning of year $367,555 $325,945 End of year $406,245 $367,555
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