Dividing Accounts receivable, net by Net sales and multiplying the result by 365 is the:
A) Accounts receivable turnover ratio.
B) Profit margin.
C) Days' sales uncollected.
D) Average accounts receivable ratio.
E) Current ratio.

Question

Quizplus · Accepted Answer

Dividing Accounts receivable, net by Net sales and multiplying the result by 365 gives us the average number of days it takes for a company to collect payment. This is known as days' sales uncollected.

Dividing Accounts Receivable, Net by Net Sales and Multiplying the Result