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Question
My boss says I am wrong to use 360 days when calculating the Accounts Receivable TurnDays. He insists that it should be 365 days. Does it make any difference? What is the GAAP standard?
Look in text book and you'll see 360 being used. It's easier to compute. The difference is about 1.5%, so for the purposes of decision making, it really doesn't make a difference.
If you are using a spreadsheet is it a fight worth having?
Good luck
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Questioner's Rating
| Rating(1-10) | Knowledgeability = 7 | Clarity of Response = 8 | Politeness = 10 |
| Comment | Unfortunately the answer given didn't answer the question, as it dealt with treatment of balance sheet and P&L rather than transactions through the GL, but thanks anyway. | ||
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Accounting, Payroll & Pension Issues
Answers by Expert:
Ed McFarland
Expertise
Over 20 years of experience as a CFO, Controller and now Consultant to small businesses. Dealt with 401k, 403b, deferred comp plans, key man issues, disablity, business continuation plans, HSA plans and other benefit issues.
Experience
Management experience in Financial Services, Manufacturing, Media, Logistics. Taught graduate and undergraduate business courses.
Education/Credentials
MBA
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