In year 1,a company had net sales of $50,000 and ending accounts receivable of $2,000.In year 2,this company had net sales of $80,000 and ending accounts receivable of $4,000.Use days' sales uncollected to determine which of the following statements is true:
A)Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days.This measure indicates that the company's liquidity is declining.
B)Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days.This measure indicates that the company's liquidity is improving.
C)Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days.This measure indicates that the company's liquidity is declining.
D)Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days.This measure indicates that the company's liquidity is improving.
E)Days' sales uncollected in year 1 is .04 days and in year 2 is .05 days.This measure indicates that the company's liquidity is improving.

Question

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The Answer of In year 1,a company had net sales of $50,000 and ending accounts receivable of $2,000.In year 2,this company had net sales of $80,000 and ending accounts receivable of $4,000.Use days' sales uncollected to determine which of the following statements is true:
A)Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days.This measure indicates that the company's liquidity is declining.
B)Days' sales uncollected in year 1 is 14.6 days and in year 2 is 18.25 days.This measure indicates that the company's liquidity is improving.
C)Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days.This measure indicates that the company's liquidity is declining.
D)Days' sales uncollected in year 1 is 25 days and in year 2 is 20 days.This measure indicates that the company's liquidity is improving.
E)Days' sales uncollected in year 1 is .04 days and in year 2 is .05 days.This measure indicates that the company's liquidity is improving.

In Year 1,a Company Had Net Sales of $50,000 and Ending