Fifer Inc. began the current year with $450,000 in accounts receivable and ended
ID: 2589939 • Letter: F
Question
Fifer Inc. began the current year with $450,000 in accounts receivable and ended the year with $590,000 in accounts receivable and $4 million in sales. Last year Fifer’s age of ending receivables was forty-six days and its receivables turnover was six times. Which of the following is not true?
a. Fifer’s age of ending receivables is 54 days.
b. Fifer’s receivables turnover is 7.69 times.
c. Fifer’s age of ending receivables is less than it was last year.
d. External decision makers monitor the time it takes a company to collect its receivables.
Explanation / Answer
Receivable trunover =4000000/(450000+590000)/2= 7.69 Age of ending receivables=365/7.69= 47 Option A Fifer’s age of ending receivables is 54 days is not correct
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