Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

East Company offers net 30 credit terms to customers that purchase on account. East Company's accounts receivable turnover was 9.09 times and the days' sales

East Company offers "net 30" credit terms to customers that purchase on account. East Company's accounts receivable turnover was 9.09 times and the days' sales in receivables 40 days for 2020. The industry averages for the same year were 8.69 times and 42 days respectively.

This indicates that

Select one:

a. East Company's collections were longer than 30 days and shorter than other companies operating in the same industry.

b. East Company's collections were shorter than 30 days and shorter that other companies operating in the same industry.

c. East Company's collections were longer than 30 days and longer than other companies operating in the same industry.

d. East Company's collections were shorter than 30 days and longer that other companies operating in the same industry.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions