B is corrent. The number of days to collect accounts receivable measures the average length of outstanding receivables which reflects credit and collection policies. The ratio to determine the average number of days to collect accounts receivable is 365 days (300 or 360 alternatively) divided by the receivable turnover (net credit sales divided by average net receivables). In this case, receivable turnover is
The number of days to collect accounts receivable is 50.7 (365/7.2).A is incorrect. The ratio to determine the average number of days to collect accounts receivable is 365 days (300 or 360 alternatively) divided by the receivable turnover (net credit sales divided by average net receivables). In this case, receivable turnover is
The number of days to collect accounts receivable is 50.7 (365/7.2). C is incorrect. The ratio to determine the average number of days to collect accounts receivable is 365 days (300 or 360 alternatively) divided by the receivable turnover (net credit sales divided by average net receivables). In this case, receivable turnover is
The number of days to collect accounts receivable is 50.7 (365/7.2).
D is incorrect. The ratio to determine the average number of days to collect accounts receivable is 365 days (300 or 360 alternatively) divided by the receivable turnover (net credit sales divided by average net receivables). In this case, receivable turnover is
The number of days to collect accounts receivable is 50.7 (365/7.2).
