Deck 6: Receivables

Question 1

The net accounts receivable reported in the current asset section of a company's balance sheet represents all receivables expected to be collected within the next year.

Answer 1

True

Question 2

The balance in Allowance for Doubtful Accounts represents the amount a company thinks it will not collect from a customer.

Answer 2

True

Question 3

Income statement effects of uncollectible accounts occur at the point of estimation, not when an account is written-off.

Answer 3

True

Question 4

Advances to company employees should be included in the Accounts Receivable balance.

Question 5

The Allowance for Doubtful Accounts is a contra account which reduces Accounts Receivable and Total Assets.

Question 6

The allowance method of accounting for uncollectible accounts recognizes the related expense, even though it is not known which customers' accounts will be uncollectible.

Question 7

Under the allowance method of estimating bad debts expense, writing off a specific account reduces the firm's net assets.

Question 8

Under the allowance method of recording uncollectible accounts, the entry to write off an account does not affect net income or total assets.

Question 9

When a firm using the allowance method of estimating bad debts expense recovers the amount of an account receivable previously written off, the recovery will increase Cash and increase Miscellaneous Income.

Question 10

A 90-day note dated April 23 has a maturity date of July 23.

Question 11

A 3-month note dated July 1 has a maturity date of October 1.

Question 12

Interest at a rate of 8% on $5,000 for 120 days equals $133 (rounded).

Question 13

The higher the accounts receivable turnover is, the faster receivables are being collected.

Question 14

On which financial statement and at what amount are accounts receivable reported?

A) Balance sheet at the amount owed by customers
B) Income statement at the net uncollectible amount
C) Income statement at the amount written off
D) Balance sheet at the net realizable value

Question 15

At what amount will accounts receivable be reported on the balance sheet if the gross receivable balance is $26,000 and the allowance for doubtful accounts is estimated at 4% of gross receivables?

A) $24,940
B) $23,500
C) $24,960
D) $14,100

Question 16

Which of the following does not occur when a company receives additional information that requires it to increase its expectations of uncollectible accounts receivable?

A) Accounts receivable (net) is reduced
B) Bad debts expense is increased
C) Net income is reduced
D) The allowance account is decreased

Question 17

Under the allowance method of accounting for credit losses, the entry to write off a specific account will:

A) Increase total assets.
B) Increase Bad Debt Expense and increase Allowance for Uncollectible Accounts.
C) Increase net income.
D) Does not affect net income or total assets.
E) None of the above

Question 18

Boulder Company had a $75,000 beginning balance in Accounts Receivable and a $3,000 balance in the Allowance for Uncollectible Accounts. During the year, credit sales were $300,000 and customers' accounts collected were $295,000. Also, $2,000 in worthless accounts were written off.
What was the net amount of receivables included in the current assets at the end of the year, before any provision was made for uncollectible accounts?

A) $65,000
B) $63,000
C) $77,000
D) $60,000
E) None of the above

Question 19

If a company fails to make an adjusting entry to estimate uncollectible accounts, this error:

A) Understates owners' equity
B) Understates assets
C) Overstates net income
D) Overstates expenses
E) Does none of the above

Question 20

Net accounts receivable before write-offs is $845,000. What is the balance in net accounts receivable if $19,800 in uncollectible accounts are written off?

A) $823,000
B) $867,000
C) $845,000
D) Cannot be determined

Question 21

Benson Company estimates its uncollectible accounts by aging its accounts receivable and applying percentages to various aged categories of accounts. Benson computes a total of $1,800 in estimated uncollectible accounts as of December 31. Its Accounts Receivable account has a balance of $56,400 and its Allowance for Doubtful Accounts has a balance of $300 before adjustment at December 31.
How much bad debt expense will Benson report in the current year?

A) $ 240
B) $1,920
C) $1,500
D) $1,680

Question 22

On December 31, before adjusting entries, Accounts Receivable had a balance of $100,000, and the Allowance for Doubtful Accounts had a balance of $3,000. Credit sales for the year were $800,000.
If credit losses are estimated at 1% of credit sales:

A) The balance of the Allowance for Doubtful Accounts will be $5,000 after adjustment.
B) The balance of the Allowance for Doubtful Accounts will be $11,000 after adjustment.
C) The balance of the Allowance for Doubtful Accounts will be $8,000 after adjustment.
D) Bad Debt Expense for the year will be $11,000.
E) None of the above

Question 23

The entry to record the write-off of Mendez, Inc.'s account using the allowance method is

A) Increase Bad Debt Expense and increase Allowance for Doubtful Accounts
B) Increase Bad Debt Expense and reduce Accounts Receivable--Mendez, Inc.
C) Reduce Allowance for Doubtful Accounts and reduce Accounts Receivable--Mendez, Inc.
D) Increase Accounts Receivable--Mendez, Inc. and increase Allowance for Doubtful Accounts
E) None of the above

Question 24

Assume the following unadjusted account balances at the end of the accounting period: Accounts Receivable, $50,000; Allowance for Doubtful Accounts, $700 (negative balance); and Net sales, $600,000. If the company's past experience indicates credit losses of 1% of net sales, the effect on the financial statements of the adjustment to estimate uncollectible accounts is:

Question 25

A firm's $90,000 Accounts Receivable balance at December 31 consisted of $80,000 current balances and $10,000 past-due balances. At December 31, the Allowance for Uncollectible Accounts had a balance of $800. The firm estimated that 2% of current balances and 15% of past-due balances will prove uncollectible. The effect of the adjustment to record credit losses on the financial statements is:

Question 26

Ruiz Company's Accounts Receivable balance at December 31 was $150,000 and there was a balance of $700 in the Allowance for Uncollectible Accounts. Sales for the year were $900,000. The firm estimates credit losses for the year at 1.5% of sales.
After the appropriate adjusting entry is made for credit losses, what is the net amount of accounts receivable included in the current assets at year-end?

A) $150,000
B) $135,800
C) $162,700
D) $138,700
E) None of the above

Question 27

McKensie Company's Accounts Receivable balance at December 31 was $100,000, and there was a negative balance of $600 in the Allowance for Uncollectible Accounts. The firm estimates that 3% of the Accounts Receivable will prove to be uncollectible.
After the appropriate adjusting entry is made for credit losses, what is the net amount of accounts receivable included in the current assets at year-end?

A) $87,900
B) $86,700
C) $97,000
D) $90,000
E) None of the above

Question 28

Mangini Company has net credit sales of $900,000 for the year and it estimates that uncollectible accounts will be 2% of sales. If its Allowance for Doubtful Accounts has a balance of $3,000 prior to adjustment, its balance after adjustment will be a credit of

A) $14,000
B) $21,000
C) $13,980
D) $13,000

Question 29

Assume the following unadjusted account balances at the end of the accounting period: Accounts Receivable, $15,000; Allowances for Uncollectible Accounts, -$400 (negative balance); Net sales, $120,000. If the company's past experience indicates credit losses of 2% of net sales, the effect of the adjustment to estimate uncollectible accounts on the financial statements is:

Question 30

Assume the following unadjusted account balances at the end of the accounting period: Accounts Receivable, $40,000; Allowance for Uncollectible Accounts, -$800 (negative balance); Sales revenue, $450,000. If the company ages the accounts and determines that $2,000 of the receivables may be uncollectible, the effect of the adjustment on the financial statements would be:

Question 31

Assume the following unadjusted account balances at the end of the accounting period: Accounts Receivable, $45,000; Allowance for Uncollectible Accounts, $500; and Sales revenue $300,000. If the company ages the accounts and determines that $2,500 of receivables may be uncollectible, the effect of the adjustment on the financial statements would be:

Question 32

Forrester Inc. had a $70,000 beginning balance in Accounts Receivable and a $2,500 balance in the Allowance for Uncollectible Accounts. During the year, credit sales were $400,000 and customers' accounts collected were $405,000. Also, $2,000 in worthless accounts were written off. An aging of the accounts indicates that 5% of the end-of-the-year Accounts Receivable balance is doubtful for collection.
What amount of Bad Debt Expense should be provided at year-end?

A) $3,150
B) $3,650
C) $3,750
D) $2,650
E) None of the above

Question 33

At the beginning of the year, Loeb Company's allowance for doubtful accounts is $12,000. During the year, $4,250 was written off as uncollectible. On December 31, Loeb Company used an aging schedule of accounts receivable and determined that $10,530 of accounts receivable would probably be uncollectible.
What is the amount of bad debt expense that should be reported on Loeb Company's income statement for the year?

A) $18,280
B) $26,780
C) $ 5,720
D) $ 2,780

Question 34

Triandis Company has the following unadjusted account balances on December 31, of the current year. The pre-adjustment balance of Allowance for Doubtful Accounts is a negative $1,600. This company uses the following aging of accounts receivable to estimate its bad debts.
The Net Realizable Value of Accounts Receivable reported on the year-end Balance Sheet will be:

A) $177,306
B) $195,694
C) $175,706
D) $174,106

Question 35

A firm that uses the allowance method of recording credit losses wrote off the $900 account of Beta Company in November. In January, Beta paid the $900. What is the effect of the re-instatement and the payment on total assets?

A) Total assets would increase by $900
B) The net effect on total assets is zero
C) Total assets would increase $1,800
D) Total assets would decrease $900
E) None of the above

Question 36

After writing off a customer's account, a company using the allowance method subsequently collected the account in full. It should:

A) Increase Cash and decrease Accounts Receivable
B) Increase Cash and increase Miscellaneous Income
C) Increase Accounts Receivable and increase Allowance for Uncollectible Accounts
D) Both A) and C)
E) None of the above

Question 37

An aging of a company's accounts receivable indicates that $10,000 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,500 balance, the adjustment to record bad debt expense for the period will require a(an):

A) Increase to Bad Debt Expense for $10,000
B) Decrease to Allowance for Doubtful Accounts for $8,500
C) Increase to Bad Debt Expense for $8,500
D) Increase to Allowance for Doubtful Accounts for $10,000

Question 38

Long Company's Accounts Receivable account has a balance of $322,000 and the Allowance for Doubtful Accounts has a negative balance of $850 at fiscal year-end prior to adjustment. If the estimate based on the percentage of sales approach to estimating uncollectibles is $19,900, the net realizable value of accounts receivable reported on the balance sheet after adjustment is:

A) $302,100
B) $302,950
C) $301,250
D) $321,150

Question 39

Prior to the write off of a $250 customer account, McDonald Company had the following account balances:
The net realizable value of Accounts Receivable before and after the write-off was:

Question 40

Doe Company's Accounts Receivable account has a balance of $400,000 at the end of the year, and the company estimates the Net Realizable Value of Accounts Receivable to be $384,000. The Allowance for Doubtful Accounts has a balance of $9,000 at the beginning of the current year, and during the year, the company wrote off $7,500 of accounts receivable.
The year-end adjustment would require:

A) An increase to Allowance for Doubtful Accounts for $17,500
B) An increase to Bad Debt Expense for $7,000
C) An increase to Bad Debt Expense for $14,500
D) An increase to Allowance for Doubtful Accounts for $16,000

Question 41

Williams Company's Accounts Receivable Account has a balance of $900,000, and the Allowance for Doubtful Accounts has a negative balance of $2,000 at the end of the year before adjustment. An analysis of their customers' accounts estimates that 2% of year end account receivable will be uncollectible.
The adjusting entry for doubtful accounts will include:

A) An increase to Bad Debt Expense $16,000
B) An increase to Allowance for Doubtful Accounts, $18,000
C) An increase to Bad Debt Expense $20,000
D) An increase to Allowance for Doubtful Accounts, $16,000

Question 42

On January 1, the accounts receivable balance for Benford Company was $7,000 and the balance in the allowance for doubtful accounts was $700. On that day, a $300 uncollectible account was written-off.
The net realizable value of accounts receivable immediately after the write-off is:

A) $6,300
B) $6,800
C) $6,500
D) $6,100

Question 43

The data below is for Randall Corporation
If the aging approach is used to estimate bad debts, determine the bad debt expense for the year.

A) $8,000
B) $8,100
C) $8,700
D) $9,900

Question 44

Accounts receivable has a balance of $1,050,000 and the allowance for doubtful accounts has a balance of $7,400 at fiscal year-end prior to adjustment. If the estimate of uncollectible accounts determined by aging the receivables is $18,500, the amount of bad debt expense is:

A) $17,500
B) $11,100
C) $24,900
D) $ 7,400

Question 45

During 2019, a company's credit sales were $131,000, and its cash collections from credit customers were $125,000. Also, $1,800 in uncollectible accounts receivable were written off (using the allowance method) during the year. On December 31, 2019, the company's Accounts Receivable balance was $25,000.
What must have been the balance of accounts receivables on January 1, 2019?

A) $32,800
B) $20,800
C) $29,200
D) $17,200

Question 46

On December 31, 2019, Hanks Company's Accounts Receivable balance was of $300,000, and an analysis of their accounts receivable suggests that the Allowance for Doubtful Accounts should be 2% of accounts receivable. The balance in the Allowance for Doubtful Accounts on January 1, 2019 was $5,970. During the year 2019, the company wrote off $6,450 of bad debts.
What amount should be reported as bad debt expense for the year 2019?

A) $6,000
B) $6,200
C) $6,480
D) $5,520

Question 47

Smith & Smith's Allowance for Doubtful Accounts had a balance of $6,300 on January 1. During year, the company wrote off $5,100 of Accounts Receivable as uncollectible. The company prepared the following summary schedule from an aging of accounts receivable outstanding on December 31:
Determine the Bad Debt Expense to be recorded on for the year.

A) $5,900
B) $4,300
C) $7,100
D) $8,300

Question 48

Tanaka Company reported total sales for the current year to be $2,500,000, including cash sales of $500,000. Management estimates bad debts to be 5% of credit sales. The Allowance for Doubtful Accounts prior to adjustment has a negative balance of $10,000.
The ending balance of the Allowance for Doubtful Accounts after adjustment will be:

A) $ 60,000
B) $ 85,000
C) $110,000
D) $ 90,000

Question 49

A retailer that makes credit card sales:

A) Makes no entries for such sales on its own records
B) Absorbs any losses on uncollectible credit card accounts
C) Is charged a fee ranging from 1% to 5% of the amount of each credit card sale
D) Records such sales as increase to Cash or Accounts Receivable, an increase to Credit Card Fees Expense, and an increase to Sales Revenue.
E) Both (C) and (D).

Question 50

Master Credit Card Company agrees to transfer cash to Seller Company immediately upon transmission of that company's credit card sales. Master Company charges 2% of card sales as its fee.
If Seller Company transmits $57,000 credit card sales, which of the following statements are true?

A) Master Company will pay Seller Company a $1,140 credit card fee.
B) Seller Company will receive cash $55,860 from Master Company.
C) Master Company will receive $57,000 cash from Seller Company.
D) Seller Company will receive $57,000 cash from Master Company.

Question 51

Clark Company paid Sherman Company for merchandise with a $4,000, 60-day, 9% note dated April 1. If Clark Company pays the note at maturity, what entry should Sherman make at that time?

Question 52

A $10,000, 3-month, 8% note is dated June 1. The maturity date and maturity value of the note are, respectively:

A) September 1; $10,200
B) August 29; $10,200
C) September 1; $200
D) August 29; $10,000
E) None of the above

Question 53

A $15,000, 120-day, 9% note is dated April 30. The maturity date and maturity value of the note are, respectively:

A) August 31; $16,480
B) August 28; $15,450
C) September 1; $16,480
D) August 28; $480
E) None of the above

Question 54

A note for $12,000 is dated May 3 and it matures on August 1. The note is a:

A) 3-month note
B) 90-day note
C) 91-day note
D) Both A and B
E) None of the above

Question 55

On December 11, Allen gave a $10,000, 60-day, 9% note to Crane in payment of an account. On December 31, Crane should record

A) $ 50 interest income
B) $ 50 interest expense
C) $150 interest income
D) $150 interest expense
E) None of the above

Question 56

If a company fails to make an adjusting entry to accrue interest on a note receivable, then this error:

A) Overstates expenses
B) Understates income
C) Understates assets
D) Understates owners' equity
E) All of these except A

Question 57

On November 16, Bell borrowed $10,000 from Graham and gave a 90-day, 12% note. On December 31, the end of the accounting period, Graham would record:

A) An increase to Notes receivable of $150
B) An increase to Interest receivable of $300
C) An increase to Cash of $150
D) An increase to Interest receivable of $150
E) None of the above

Question 58

Well Company paid Being Company for merchandise with a $4,500, 90-day, 10% note dated December 11. What is the financial statement effect to Being Company at the end of the accounting period on December 31?

Question 59

Rodriguez, Inc. received an $8,000 30-day, 9% note dated December 21. On December 31, Rodriguez made the necessary adjusting entry to accrue interest income on the note. What is the financial statement effect to Rodriguez for the payment of the note on January 20?

Question 60

Aarons Company lends Zenith Company $50,000 on April 1, accepting a four-month, 9% interest note. Aarons Company prepares its financial statements on April 30. What is the financial statement effect of the adjustment on April 30^th to Aarons Company?

Question 61

Jazz Company lends Sullivan Company $30,000 on August 1, 2019 in exchange of a 9-month, 12% interest note. If Jazz Company accrued interest on its December 31, 2019 year-end, what is the financial statement effect of the collection of the note and interest at its maturity date?

Question 62

On November 1, Kotler Company accepted a 3-month note receivable as payment for services provided to Norman Company. The face value was $9,000, and it had a stated 6% annual rate of interest. Kotler Company made the required accrual on December 31.
On February 1, the entry to record the collection of the note should include:

A) A decrease to Notes Receivable for $8,135
B) A decrease to Interest Receivable for $135
C) An increase to Interest Income for $135
D) An Increase to Interest Income for $45

Question 63

A company is holding a $6,000, 90-day, 6% note receivable, dated December 1. The entry to record accrued interest at the end of its fiscal year on December 31 will include:

A) An increase to interest receivable for $30
B) An increase interest income for $90
C) A decrease to note receivable for $6,000
D) An increase to cash for $6,090

Question 64

A company received a Note Receivable from a customer for a sale. The 9 percent, 9-month note was received on May 31 for an amount of $150,000. Determine the company's accrued interest receivable (from this note) on its December 31 balance sheet.

A) $ 6,750
B) $ 9,000
C) $13,500
D) $ 7,875

Question 65

On December 1, 2019, Montgomery Company accepts a $12,000, 90 day, 8% note from a customer. If Montgomery Company's accounting period ends on December 31, and the note is collected on March 1, 2020, which one of the following statements will be true for Montgomery Company?

A) On March 1, 2020, they will reduce Interest Receivable for $80
B) On December 31, 2019, they will reduce Interest Income for $80
C) On December 31, 2019, they will reduce Interest Receivable for $80
D) On March 1, 2020, they will increase Interest Revenue for $80

Question 66

On December 1, 2019, Temps Company accepted a $12,000, 120 day, 8% note from a customer in granting an extension to a past due account. Temps Company's accounting period ends on December 31, and the note is collected in full on the due date.
Which one of the following statements will be false for Temps Company?

A) On March 31, 2020, they will increase Interest Revenue for $240
B) On December 31, 2019, they will reduce Interest Receivable for $80
C) On March 31, 2020, they will reduce Interest Receivable for $80
D) On March 31, 2020, they will reduce Notes Receivable for $12,000

Question 67

Which of the following formula computes the average collection period?

A) 365 / Average accounts receivable
B) Account receivable / Average daily sales
C) Sales / Average accounts receivable
D) 365 / Accounts receivable turnover

Question 68

If the collection period lengthens compared to historic figures and industry averages, what might the reason be?

A) Deterioration of collectability of receivables
B) A change in sales mix to longer paying customers
C) A decrease in the amount of sales generated
D) A and B
E) All of the above

Question 69

Jackson, Inc. had net sales of $900,000 during 2019. On January 1, 2019, Jackson's accounts receivable were $160,000. On December 31, 2019 Jackson's accounts receivable were $200,000.
What was Jackson's accounts receivable turnover for 2019?

A) 4.25
B) 5
C) 73
D) 8.5
E) None of the above

Question 70

Jackson, Inc. had net sales of $900,000 during 2019. On January 1, 2019, Jackson's accounts receivable were $160,000. On December 31, 2019, Jackson's accounts receivable were $200,000.
What was Jackson's average collection period for 2019?

A) 73 days
B) 5 days
C) 8.5 days
D) 42.5 days
E) None of the above

Question 71

Quick Market reports the following analysis of potential losses in its accounts receivable:
The balance of Allowance for Doubtful Accounts is $200 on December 31, 2019 prior to adjustments.
Required:
a. Compute bad debt expense that will be recorded for 2019. Round your calculations to the nearest dollar.
b. What is the net realizable value of accounts receivable to be reported on Quick Market's December 31, 2019 balance sheet?

Question 72

Oliver, Inc. estimated uncollectible accounts receivable at December 31, 2019 at $3,372, based on estimates on various ages of receivables and before learning of the bankruptcy of one of its customers. The customer owed $1,340, and the legal department has estimated costs to collect the balance owed by this customer at $2,000. The gross receivables balance on December 31, 2019 after write-offs is $84,300, and the allowance for doubtful accounts balance is $3,620 at December 31, 2018. At December 12, 2019, the company wrote off $1,700 other accounts deemed uncollectible.
Required:
a. How would the legal department advise Oliver to handle the collection of the $1,340?
b. What is the amount of Bad Debt Expense Oliver will report for 2109, assuming that both the $1,700 and $1,340 have been written off.
c. What is the effect of the $1,700 write off on gross and net accounts receivable?

Question 73

Forrester Inc. provided the following aging of its receivables at December 31.

During the year, $6,256 of receivables were written off. The balance at the beginning of the year in the allowance account was $6,000.
Required:
a. How much will Forrester report as bad debt expense for the year? Round your calculations to the nearest dollar.
b. How much is the net realizable value of Forrester's receivables at year end?

Question 74

Likert Co. reports the following in its 2019 annual report (amounts in thousands):

Calculate the accounts receivable turnover and average collection period for 2019 and 2018. Comment on the findings.

Question 75

At December 31, 2019, Hanna Toys had a balance of $82,700 in its Accounts Receivable account and a balance of $300 in its Allowance for Doubtful Accounts account. The company analyzed and aged its accounts receivable based on the following estimated uncollectible amounts:

The company bases its provision for credit losses on the aging analysis.
Required:
a. What amount of bad debt expense will Hanna Toys report in its 2019 income statement? Round all your calculations to the nearest dollar.
b. How would Accounts Receivable and the Allowance for Doubtful Accounts appear in its December 31, 2019, balance sheet?

Question 76

Rexbilt Company estimates its credit losses at 2% of credit sales, which were $600,000 this year. At December 31 of this year, the Accounts Receivable balance is $90,000, and the Allowance for Doubtful Accounts has a $1,200 balance before adjustment.
Required:
a. What amount of bad debt expense will Rexbilt report for this year.
b. What net amount of accounts receivable would appear on the December 31 balance sheet this year?
c. Assume that Rexbilt Company uses aged accounts receivable as a basis of estimating credit losses, instead of a percent of credit sales. If the firm estimates that $7,600 of the accounts will prove uncollectible, what amount of bad debt expense will Rexbilt report for this year?

Question 77

On January 1 of the current year, Slaton, Inc. had the following accounts on its books:

During this year, credit sales were $600,000 and collections on account were $580,000.
Required:
a. Prepare general journal entries for the following transactions that occurred during the year:
(1) Wrote off L. Baxter's account, $3,400.
(2) Wrote off N. Vale's account, $1,200.
(3) N. Vale, who is in bankruptcy, paid $400 in final settlement of the account written off in transaction (2). This amount is not included in the $580,000 collections.
(4) On December 31, estimated the year's bad debts expense at 1% of credit sales.
b. Determine the balance of Accounts Receivable and the Allowance for Doubtful Accounts at year-end.

Question 78

At December 31 of the current year, Roberts Company had a balance of $364,000 in its Accounts Receivable account and a balance of $3,000 in the Allowance for Doubtful Accounts. The company has aged its accounts as follows:
In the past, the company has experienced losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over 180 days past due. The company bases its bad debt expense on the aging analysis.
Required:
a. Determine the amount of bad debt expense for the year.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.
c. On January 15 of the subsequent year, Roberts Company wrote off the account of B. Jensen, $1,200. What if the effect on gross receivables and total assets of the write off?
d. On February 20 of the subsequent year, Roberts Company collected the $1,200 on the Jensen account written off on January 15. What is the effect on the Allowance for Doubtful Accounts and Total Assets as a result of the recovery?

Question 79

Smith's accounts receivable financial data (in millions) for three years are listed below:
Required:
a. Calculate the net realizable value of receivables that will be reported on Smith's balance sheet for each year.
b. Determine the accounts receivable turnover for 2019 and 2018.
c. Compare the accounts receivable turnovers for 2019 and 2018 and comment on the differences.

Question 80

Define accounts receivable turnover and the average collection period. What insights do these ratios offer an analysis of a company's accounts receivable?