Dividing accounts receivable, net by net sales and multiplying the result by 365 is the:
A) Profit margin.
B) Days' sales uncollected.
C) Accounts receivable turnover ratio.
D) Average accounts receivable ratio.
E) Current ratio.

Question

Quizplus · Accepted Answer

Dividing accounts receivable, net by net sales and multiplying the result by 365 gives us the number of days it takes on average to collect from customers, which is known as days' sales uncollected.

Dividing Accounts Receivable, Net by Net Sales and Multiplying the Result