Schilit & Perler advocate using days' sales of payable (DSP) to detect financial shenanigans, DSP is computed as average accounts payable divided by cost of goods sold times days in the period. ending accounts payable divided by cost of goods sold times days in the period. ending accounts payable divided by days in the period. average accounts payable divided by days in the period. 、
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the is also known as the day's sales outstanding. it is the average length of time required to convert the firm's receives into cash , that is to collect cash following a sale. it is calculated as follows: receivables/(sales/365)
Kenny M.
the payables deferral period is the average length of time between the purchase of materials and labor and the payment of cash further. it is calculated as: payables/(cost of goods sold/365)
Harper Corp.'s sales last year were $385,000, and its year-end receivables were $43,500. Harper sells on terms that call for customers to pay 30 days after the purchase, but many delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when calculating the DSO.
Kevra B.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
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