The ratio that provides an estimate of the number of days, on average, that it takes for customers to pay their account is the:
A) days' sales in receivables
B) current ratio.
C) accounts receivable turnover.
D) acid-test ratio.

Question

Quizplus · Accepted Answer

Days' sales in receivables is a ratio that estimates the number of days it takes for customers to pay their accounts. It is calculated by dividing the accounts receivable by the average daily sales.

The Ratio That Provides an Estimate of the Number of Days