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)Estimate how much time is likely to pass before the amount of accounts receivable is collected.
E)Measure the amount of layaway sales for a period.

Question

Quizplus · Accepted Answer

The days' sales uncollected ratio is a measure of how many days it takes, on average, for a company to collect on its accounts receivables. This ratio provides an estimate of how much time is likely to pass before the amount of accounts receivable is collected. Therefore, option D is the best choice.

The Days' Sales Uncollected Ratio Is Used To