Which of the following ratios, when small, may indicate an inadequate estimation process? 1. Uncollectible accounts...
Which of the following ratios, when small, may indicate an inadequate estimation process?
1. Uncollectible accounts expense to accounts receivable write-offs
2 Uncollectible accounts expense to net credit sales
3 Accounts receivable turnover in days
4 Accounts receivable growth to sales growth
Homework Answers
Answer : 1. Uncollectible accounts expense to accounts receivable write-offs
Explanation:
Uncollectible accounts expense to accounts receivable write-offs =
Uncollectible accounts expense of prior year / Actual accounts receivable write-offs in current year.
For audit purpose this ratio indicates the reasonableness or fairness of uncollectible accounts expense in the previous year. Thus a small ratio may signify an inadequate estimation process.
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Which of the following ratios, when small, may indicate an
inadequate estimation process?
1. Uncollectible accounts...
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only final answers plz
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