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Foundations Of Financial Management
Found in: Page 221
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

Route Canal Shipping Company has the following schedule for aging of accounts receivable:

e. What additional information does the aging schedule bring to the company that the average collection period may not show?

The aging schedule helps in evaluating the credit policy and forecasting cash inflows.

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Step by Step Solution

Meaning of aging schedule

The aging schedule depicts the organization’s accounts receivables and the due date of these receivables. This schedule helps an organization in evaluating it its customers are paying their debt on time.

Explanation of requirement

The aging schedule helps the organization evaluate the efficiency of its credit policy. This schedule also helps an organization in forecasting its cash inflows.

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