Evaluating the Quality of Receivables

question 50

Essay

Evaluating the quality of receivables
(a.)The 2015 annual report of Modern Books,a publicly traded corporation,reports accounts receivable (net of allowance for doubtful accounts),of $190,714 as of February 28,2015.What assurance do readers of Modern Books ' annual report have that these receivables really exist and are not fictitious assets recorded to make the balance sheet "look good"?
(b.)The accounts receivable turnover rate is frequently used in evaluating the liquidity of accounts receivable.How is the accounts receivable turnover rate computed? What type of information does the accounts receivable turnover rate provide?

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Definitions:

Prosecutorial Misconduct

Inappropriate or illegal actions taken by a prosecutor, such as withholding evidence, that can unfairly influence the outcome of a trial.

Misleading Conduct

Misleading conduct involves actions or statements that deceive or create false impressions or expectations, often in a legal or commercial context.

Defense Attorneys

Legal professionals who represent and advocate on behalf of individuals accused of crimes.

Legal and Ethical Rules

Guidelines and principles that govern conduct within professional practices, distinguishing right from wrong.