Accounts receivable turnover decreased substantially from the prior year. Which of the following is a possible explanation for this finding?
Ans: Items shipped on consignment during the last month (of this year) were recorded as sales.
Need clarification as to the above. Since AR turnover = (sales/avg net receivables). A consignment sale improperly recorded as a sale would either cause the ratio to stay constant or increase (if allowance for doubtful account is considered). Any help will be appreciated. Thanks