The days debtors ratio indicates:
A) the average length of time it takes an entity to pay its account payable.
B) the average length of time it takes an entity to collect its accounts receivable.
C) an entity's efficiency in paying back its borrowings.
D) an entity's efficiency in raising capital.

Question

Quizplus · Accepted Answer

The days debtors ratio measures the average length of time it takes for an entity to collect its accounts receivable, representing the efficiency of the entity in collecting debts owed to it.

The Days Debtors Ratio Indicates