Indicate whether each of the following statements about financial statement analysis is true or false.Working capital measures a company's immediate debt-paying ability. ______Accounts receivable turnover is a direct measure of a company's uncollectible accounts expense. ______Accounts receivable turnover is calculated by using the following formula: net credit sales ÷ average accounts receivable. ______Net credit sales is sales on account plus sales returns and discounts. ______The amount of average receivables can be calculated using the amount of receivables shown on balance sheets for the current year and previous year. ______
What will be an ideal response?
Working capital measures a company's immediate debt-paying ability. T
Accounts receivable turnover is a direct measure of a company's uncollectible accounts expense. F
Accounts receivable turnover is calculated by using the following formula: net credit sales ÷ average accounts receivable. T
Net credit sales is sales on account plus sales returns and discounts. F
The amount of average receivables can be calculated using the amount of receivables shown on balance sheets for the current year and previous year. T
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