Indicate Whether Each of the Following Statements About Financial Statement

question 83

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
1. Working capital measures a company's immediate debt-paying ability.
2. Accounts receivable turnover is a direct measure of a company's uncollectible accounts expense.
3. Accounts receivable turnover is calculated by using the following formula: net credit sales/average accounts receivable.
4. Net credit sales is sales on account plus sales returns and discounts.
5. The amount of average receivables can be calculated using the amount of receivables shown on balance sheets for the current year and previous year.

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