The days' sales uncollected ratio is used to
A)Measure how many days of sales remain until the end of the year
B)Determine the number of days that have passed without collecting on accounts receivable
C)Identify the likelihood of collecting sales on account
D)Measure the amount of layaway sales for a period
E)Estimate how much time is likely to pass before cash receipts from credit sales equal the amount of the existing accounts receivable

Question

Quizplus · Accepted Answer

The days' sales uncollected ratio calculates the average number of days it takes for a company to collect payment from its customers for credit sales. It estimates how much time is likely to pass before cash receipts from credit sales equal the amount of the existing accounts receivable.

The Days' Sales Uncollected Ratio Is Used to