Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

B Limited recorded credit sales of $\$3\,285\,000$ during the year and had trade receivables of $\$405\,000$ at the year end. The sales director thought that, if cash discounts had been offered, trade receivables would have been $\$351\,000$. The allowance for irrecoverable debts would also have been reduced by $\$9\,000$. What impact would the discounts have had on trade receivables turnover?

  • AIt would have been 5 days faster.
  • BIt would have been 5 days slower.
  • CIt would have been 6 days faster.
  • DIt would have been 6 days slower.

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