Which of the following is the correct days sales outstanding calculation?
A) Revenues / Accounts receivable
B) Accounts receivable/ Revenues
C) Average daily sales/ Accounts receivable
D) Accounts receivable/Average daily sales

Question

Quizplus · Accepted Answer

Days Sales Outstanding (DSO) is calculated by dividing the accounts receivable by the average daily sales. This measures the average number of days it takes a company to collect payment after a sale has been made.

Which of the Following Is the Correct Days Sales Outstanding