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Question
The following data are taken from the financial statements:
| Current Year | Preceding Year | |
| Average accounts receivable (net) | $123,000 | $ 95,000 |
| Accounts receivable (net), end of year | 129,012 | 87,516 |
| Sales on account | 950,000 | 825,000 |
a. Assuming that credit terms on all sales are n/45, determine for each year:
(1) Accounts receivable turnover (Round to two decimal places.)
(2) Number of days sales in receivables (Round intermediate computation to the nearest whole number and the final answer to two decimal places.)
b. What conclusions can be drawn from these data concerning accounts receivable and credit policies?
Answer
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