The number of days' sales in receivables

A) is an estimate of the length of time the receivables have been outstanding
B) measures the number of times the receivables turn over each year
C) is credit sales divided by average receivables
D) is not meaningful and therefore is not used

Question

Shamir Sinlae · Accepted Answer

Final Answer : A, Explanation :  The number of days' sales in receivables is calculated by dividing the accounts receivable balance by average daily credit sales. This calculation provides an estimate of the average number of days it takes a company to collect its accounts receivable. Therefore, option A is the correct choice as it correctly defines the number of days' sales in receivables. Options B, C, and D are incorrect as they do not provide an accurate definition of the calculation.

The number of days' sales in receivables

A) is an estimate of the length of time the receivables have been outstanding
B) measures the number of times the receivables turn over each year
C) is credit sales divided by average receivables
D) is not meaningful and therefore is not used

Definitions

Learning Objectives

Learning Objectives

Related questions

The number of days' sales in receivablesA) is an estimate of the length of time the receivables have been outstandingB) measures the number of times the receivables turn over each yearC) is credit sales divided by average receivablesD) is not meaningful and therefore is not used

Definitions

Learning Objectives

Learning Objectives

Related questions

The number of days' sales in receivables

A) is an estimate of the length of time the receivables have been outstanding
B) measures the number of times the receivables turn over each year
C) is credit sales divided by average receivables
D) is not meaningful and therefore is not used