If a Firm Has a Large Percentage of Accounts Over

question 78

True/False

If a firm has a large percentage of accounts over 30 days old, it is a sign that the firm's receivables management needs to be reviewed and improved.

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Definitions:

Adjusting Journal Entry

A type of journal entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Accrual

The accounting practice that documents income and expenditures at the time they happen, irrespective of the timing of the actual cash flows.

Retained Earnings

The amount of net profit remaining for the company after distributing dividends to its stockholders.

Note Payable

A written promise to pay a specified amount of money, along with interest, by a certain date.