Ratio analysis: Liquidity ratios The average collection period measures the average number of days it takes to collect a receivable. It is generally desirable to collect receivables as promptly as possible. The cash collected from receivables improves liquidity. Prompt collection also lessens the risk of loss from uncollectible accounts. To compute the average collection period, the […]
Ratio analysis: Profitability ratios Cash return on sales ratio indicates a company’s ability to turn sales into cash. Cash return on sales ratio is found by dividing cash from operating activities by net sales. Cash return on sales ratio = Cash from operating activitiesNet sales = $119,300$255,000 = 0.46784… = 0.47 Â
Revenue recognition: Basic questions Click following link to download this documentRevenue recognition Basic questions.docx
Week 5 Seller’s retail entries: Problem type 2 Click following link to download this documentWeek 5 Seller retail entries Problem type 2.docx
Seller’s retail entries: Problem type 1 Click following link to download this documentweek 5 Sellers retail entries Problem type 1.docx
Seller’s retail entries: Problem type 3 Click following link to download this documentweek 5 Sellers retail entries Problem type 3.docx
Inventory errors: Problem type 1 As shown in the chart above, errors in calculating the ending inventory cost have a direct effect on gross profit and net income. Errors in calculating the beginning inventory cost have an inverse effect on gross profit and net income. Note that the effects of errors in calculating beginning and ending inventory costs have an