An aging schedule illustrates the relationship between:
A) customers and repeat sales.
B) sales and profitability.
C) the ratio of accounts receivable to sales.
D) accounts receivable and their average time outstanding.

Question

Quizplus · Accepted Answer

An aging schedule is a report that indicates the number of days that accounts receivable are outstanding. It shows the relationship between accounts receivable and their average time outstanding, making option D the correct answer. It provides a snapshot of the company's ability to collect on its sales and, as a result, can impact both sales and profitability (option B), but the aging schedule itself does not directly show this relationship. It also does not relate to customers and repeat sales (option A) or the ratio of accounts receivable to sales (option C).

An Aging Schedule Illustrates the Relationship Between