The aging schedule of a firm shows that 40 percent of the receivables are collected in 18 days and the remaining 60 percent of the receivables are collected in 50 days. As a result, the firm's days sales outstanding (DSO) is _____.

Question

Quizplus · Accepted Answer

The DSO can be calculated by taking the weighted average of the days based on the percentage of receivables collected in those days. So, (40% * 18 days) + (60% * 50 days) = 7.2 days + 30 days = 37.2 days.

The Aging Schedule of a Firm Shows That 40 Percent