The Palmetto receivable aging shows $194,000 total receivables and $41,000 over 30 days. What percent of receivables is over 30 days?
Correct Answer
B) 21.1%
The over-30 percentage equals over-30 receivables divided by total receivables.
Why This Is the Correct Answer
The over-30 percentage equals over-30 receivables divided by total receivables.
Why the Other Options Are Wrong
Option A: 59.8%
59.8% is above the supported result for aging percentage; it likely adds an unsupported amount or compares the wrong financial base.
Option C: 78.9%
78.9% is above the supported result for aging percentage; it likely adds an unsupported amount or compares the wrong financial base.
Option D: 35.3%
35.3% is above the supported result for aging percentage; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Collection Manager money test: bucket before math for aging percentage.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Business Administration, Receivable Aging and Collection Controls; use the stated business record or control rule to verify the answer.
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