Acc 291-T Wk3 Summative Assessment

14-15

At the end of Year 1, Vaststrom Company's bad debt allowance, as a percentage of accounts receivable, was 20%6. By the end of Year 2, that percentage was 27%. Given these data, which ONE of the following statements is true with respect to the creditworthiness of the credit customets of Vaststrom Company at the end of Year 2 compared to Year 1? The average creditworthiness of the credit customers STAYED THE SAME during the year. In other words, the quality of the accounts receivable STAYED THE SAME during the year. The average creditworthiness of the credit customers DECLINED during the year. In other words, the quality of the accounts receivable DECLINED during the year. The average creditworthiness of the credit customers IMPROVED during the year. In other words, the quality of the accounts receivable IMPROVED during the year. These data do not allow us to draw ANY conclusions about the average creditworthiness of the Vaststrom Company credit customers. Bountiful Company had a number of days' sales in inventory of 65 days in Year 1 and 50 days in Year 2 . Which of the following statements is TRUE? The amount of the company's accounts receivable decreased from Year 1 to Year 2. The company's credit customers waited longer to pay in Year 2 than they did in Year 1. The company sold inventory more quickly in Year 2 than it did in Year 1. The amount of the company's accounts payable increased from Year 1 to Year 2