Which of the following statements regarding the receivables turnover ratio is true?
A) The receivables turnover ratio indicates how many times, on average, the process of selling to and collecting from customers occurs during the accounting period.
B) Companies of similar size operating in the same country tend to have similar receivables turnover ratios.
C) A high turnover ratio may suggest the company is allowing too much time for customers to pay.
D) The receivables turnover ratio is used to calculate the days to collect by dividing the turnover ratio by 365

Question

Quizplus · Accepted Answer

The receivables turnover ratio measures how efficiently a company is collecting payments from customers by dividing net sales by average accounts receivable.

Which of the Following Statements Regarding the Receivables Turnover Ratio