The days sales outstanding tells us how long it takes,on average,to collect after a sale is made.The DSO can be compared with the firm's credit terms to get an idea of whether customers are paying on time.

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The statement accurately describes the role and significance of days sales outstanding (DSO) in measuring the effectiveness of a company's collections practices and credit policies. By comparing the DSO with the firm's credit terms, managers can determine if customers are paying promptly or if there are issues with delinquency or default.

The Days Sales Outstanding Tells Us How Long It Takes,on