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A firm has seasonal sales and customers who all pay promptly in the month following the...

A firm has seasonal sales and customers who all pay promptly in the month following the sale. Given these facts, determine whether each of the following statements is true or false:

1.) DSO will vary from quarter to quarter                                                                           

2.) The quarterly uncollected balances schedule will be the same in each quarter                  

3.) The level of accounts receivable will be constant from month to month                           

                        

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Answer #1

Ans. 1 True ( because Days sales outstanding vary from day to day so that is why it will vary from each quarter also)

Ans. 2 False ( the balances will not necessarily be the same in each quarter)

Ans. 3 False ( accounts receivable will not be constant from month to month one of the reason of this is the seasonal sales )

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