__________________ represents the average time it takes to collect credit accounts.

Question

Quizplus · Accepted Answer

Days sales outstanding (DSO) measures the average number of days it takes for a company to collect payments from its customers. It is calculated by dividing accounts receivable by the average daily credit sales. Therefore, A is the correct choice as it directly relates to the average time it takes to collect credit accounts. B is not a commonly used term in finance, C refers to the set of rules a company has in place for collecting debts, and D is not a term in finance.

__________________ Represents the Average Time It Takes to Collect Credit