The firm's receivables conversion period (measured in days) is equal to its accounts receivable divided by its ____.

Question

Quizplus · Accepted Answer

The receivables conversion period is a measure of how long it takes for a firm to collect its accounts receivable. It is calculated by dividing accounts receivable by the average daily credit sales. Since the question asks for the measurement in days, we need to divide the annual credit sales by 365. Therefore, the correct answer is A.

The Firm's Receivables Conversion Period (Measured in Days) Is Equal