Which of the following statements about receivables turnover analysis is correct?
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 in different industries 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 days to collect ratio is found by dividing the receivables turnover ratio by 365 days.

Question

Quizplus · Accepted Answer

The receivable turnover ratio determines the average number of times the process of selling and collecting occurs during the period.This ratio often varies across industries.A low (rather than not high)turnover ratio may suggest the company is allowing too much time for customers to pay.The days to collect ratio is calculated by dividing 365 by the receivables turnover ratio.

Which of the Following Statements About Receivables Turnover Analysis Is