How is days to collect accounts receivable determined?
A) 365 days divided by accounts receivable turnover.
B) Net sales divided by 365.
C) Net sales divided by average net trade receivables.
D) Accounts receivable turnover divided by 365 days.

Question

Quizplus · Accepted Answer

Days to collect accounts receivable is determined by dividing 365 days by accounts receivable turnover. This formula gives an estimate of how long it takes for a company to collect its outstanding accounts receivable in days.

How Is Days to Collect Accounts Receivable Determined