Examlex

Solved

A Company Reported Net Sales for 2016 of $265,000 and $545,000

question 9

Essay

A company reported net sales for 2016 of $265,000 and $545,000 for 2017. The year-end balances of accounts receivable were $39,000 for 2016 and $92,000 for 2017. Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.


Definitions:

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, taxes, and costs associated with sustaining the activity.

Total Losses

The sum of all expenses, debts, or damages that exceed gains and revenues.

Assets Test

A measure used to determine a company's financial stability by comparing its liquid assets against its liabilities.

Operating Segment

A part of a company that participates in commercial operations, generating income and bearing costs, which encompasses transactions and financial activities with other sectors of the same company.

Related Questions