Yes, but the journal entries are pretty basic.
Say average AR remained the same, but sales increased year over year, you would expect the AR ratio to increase because a higher credit sales number is being divided by the same AR number. Which means that you must have gotten better at collecting receivables because you've managed to have the same AR, but increase sales, which means you collected a larger percentage.
Say you failed to record a sale in the prior year, and you have net credit sales of 100,000 and average AR of 10,000, which would leave you with a ratio of 10. Say you included that sale, both numerator and denominator would increase, which would result in a lower turnover ratio. Say the unrecorded sale is 10,000, we'll post the entry:
AR – Debit – 10,000
Net Sales – Credit 10,000
Now our AR is 20,000 and our credit sales is 110,000. Then we do the ratio, 110,00/20,000=5.5, so the turnover ratio went down. Let me know if I am getting this correct, I've only seen one problem, but trying to make sense of it in my head.
FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.
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