Reference no: EM132830060

Problem 1. What should a company do to improve its accounts receivable turnover rate?

a. Lower its selling prices.

b. Increase its sales force.

c. Give customers credit terms of 2/10, n/30 rather than 1/10, n/30.

d. Reduce the number of employees working in the credit department.

Problem 2. Which of the following statements is true regarding the two allowance methods used to account for bad debts?

a. The percentage of net credit sales approach takes into account the existing balance in the Allowance for

Doubtful Accounts account.

b. The direct write-off method takes into account the existing balance in the Allowance for Doubtful Accounts account.

c. The percentage of accounts receivable approach takes into account the existing balance in the Allowance for

Doubtful Accounts account.

d. The direct write-off method does a better job of matching revenues and expenses.