Declan Inc

question 58

Multiple Choice

Declan Inc.calculated its accounts receivable turnover for 2017 to be 20.0.Both years prior to 2017 showed accounts receivable turnovers to be 12.0.Based on this information,what is the best explanation for the change?

• A)The company had fewer accounts receivable in 2017 than the prior two years.
• B)The company had more sales in 2017 than in the prior two years.
• C)The company had fewer sales in 2017 than in the prior two years.
• D)The company took longer to collect their accounts receivable in 2017 than the prior two years.
• E)None of the answer choices is correct.

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Definitions:

Equity

The value of an ownership interest in property, including shareholders' ownership in a company.

Accounting Equation

The fundamental principle of accounting stating that Assets = Liabilities + Equity.

Measurement Principle

A financial accounting principle that determines the specific basis (historical cost or fair value) on which assets and liabilities are recorded in the financial statements.

Actual Cost

The incurred cost that reflects the real financial expenditure on a project, purchase, or activity.