Unit $3$: Test $-$ Accounting for Cash and Accounts Receivable

$($Application$)$

BAT $4$MI: Principles of Accounting II

Question $4$: Analyzing Accounts Receivable $(11$ marks$)$

The following chart displays some figures relating to accounts receivables for two related

companies:

Instructions:

a$)$ Calculate the accounts receivable turnover for both companies.$(4$ marks$)$

b$)$ Calculate the collection period for both companies. $(2$ marks$)$

c$)$ Briefly comment on how these two companies compare. Provide three explanations as

to why the difference between the two companies exists $($or speculate as to why it could

exist$).$ Point form is acceptable. $(5$ marks$)$