of the following is TRUE of days' sales in receivables?
A) Days' sales in receivables measures how many days it takes to order and receive inventory.
B) Days' sales in receivables measures how frequently during the year the accounts receivable are converted into cash.
C) Days' sales in receivables measures how many days it takes to sell inventory.
D) None of the above is true.

Question

Quizplus · Accepted Answer

Days' sales in receivables is a financial metric that measures the average number of days it takes for a company to collect payments from its credit sales, essentially showing how frequently accounts receivable are converted into cash over a period.

Of the Following Is TRUE of Days' Sales in Receivables