Days' sales in receivables measures ________.
A) how many days it takes to order and receive inventory
B) how many days it takes to collect the average level of accounts receivable
C) how many days it takes to sell inventory
D) the number of times a company collects the average accounts receivable balance in one year

Question

Quizplus · Accepted Answer

Days' sales in receivables measures how many days it takes to collect the average level of accounts receivable. It is calculated by dividing the average accounts receivable by the average daily sales and multiplying by the number of days in the period.

Days' Sales in Receivables Measures ________