Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question.
Refer to the data for Pinecrest Company.
Competitors in Pinecrest Company's industry have an average accounts receivable turnover of 7.8 times.Pinecrest reported accounts receivable at December 31,2012 of $57,200.Pinecrest's accounts receivable turnover for 2014 is:
A)an indicators that the company needs to tighten its credit policies.
B)of no value to bankers and other creditors.
C)less efficient in 2014 than in 2013.
D)significantly below the standards required by the U.S.government.

Question

Pinecrest Company Use the selected data from Pinecrest Company's financial statements to answer the following question.
 Refer to the data for Pinecrest Company.
Competitors in Pinecrest Company's industry have an average accounts receivable turnover of 7.8 times.Pinecrest reported accounts receivable at December 31,2012 of $57,200.Pinecrest's accounts receivable turnover for 2014 is:
A)an indicators that the company needs to tighten its credit policies. 
B)of no value to bankers and other creditors. 
C)less efficient in 2014 than in 2013. 
D)significantly below the standards required by the U.S.government.

Quizplus · Accepted Answer

The accounts receivable turnover for 2014 can be calculated by dividing net credit sales by the average accounts receivable. Without knowing the net credit sales, we cannot determine the exact ratio. However, we can infer that the turnover ratio for Pinecrest is less efficient in 2014 than the industry average of 7.8 times. This suggests that Pinecrest is taking longer to collect its accounts receivable compared to its competitors, which could indicate issues with its credit policies or with the creditworthiness of its customers.

Pinecrest Company Use the Selected Data from Pinecrest Company's Financial