The number of days' sales uncollected is calculated by
A)Dividing accounts receivable by net sales and multiplying the result by 365
B)Dividing accounts receivable by net sales
C)Dividing net sales by accounts receivable
D)Dividing net sales by accounts receivable and multiplying the result by 365
E)Multiplying net sales by accounts receivable and dividing the result by 365

Question

Quizplus · Accepted Answer

The number of days' sales uncollected is an indication of how long it takes a company to collect its accounts receivable. It is calculated by dividing accounts receivable by net sales and multiplying the result by 365. This calculation gives the number of days' worth of sales that are tied up in accounts receivable.

The Number of Days' Sales Uncollected Is Calculated by