Question

Ptarmigan Travelers had sales of $420,000 in 2013 and $480,000 in 2014. The firm's current asset accounts remained constant. Given this information, which one of the following statements must be true? A. The total asset turnover rate increased. B. The days' sales in receivables increased. C. The inventory turnover rate increased. D. The fixed asset turnover decreased. E. The collection period decreased.

Answer 1

Answer:

E. The collection period decreased.

Explanation:

Ptarmigan Travelers had sales of $420,000 in 2013 and $480,000 in 2014. The firm's current asset accounts remained constant. Given this information, the true statement is that the collection period decreased.

Answer 2

Answer:

The correct answer is E. The collection period decreased.

Explanation:

Given the information above, Ptarmigan Travelers collection period decreased.