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Question
In year 1 a company had net sales of $50,000 and ending accounts receivable of $2,000. In year 2 this company had net sales of $80,000 and ending accounts receivable of $4,000. Use days' sales uncollected to determine which of the following statements is true:.
A. Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days. This measure indicates that the company's liquidity is declining.
B. Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days. This measure indicates that the company's liquidity is improving.
C. Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days. This measure indicates that the company's liquidity is declining.
D. Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days. This measure indicates that the company's liquidity is improving.
E. Days' sales uncollected in year 1 is .04 days and in year 2 is .05 days. This measure indicates that the company's liquidity is improving.
Answer
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Related questions
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Q:
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