The days' sales uncollected ratio reflects on the liquidity of accounts receivable.

Name: The days' sales uncollected ratio reflects on the liquidity of accounts receivable.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The days' sales uncollected ratio measures the average number of days it takes for a company to collect its accounts receivable. A lower ratio indicates better liquidity, as it shows that the company is able to collect its accounts receivable more quickly. Therefore, the statement is true.

The Days' Sales Uncollected Ratio Reflects on the Liquidity of Accounts