The number of days' sales uncollected:
A)Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.
B)Can be used for comparisons to other companies in the same industry.
C)Can be used for comparisons between current and prior periods.
D)Reflects the liquidity of receivables.
E)All of the options are correct.

Question

Quizplus · Accepted Answer

All of the options are correct. The number of days' sales uncollected measures how much time it takes for a company to collect its accounts receivables, reflecting the liquidity of the receivables. It can be used for comparisons to other companies in the same industry or between current and prior periods.

The Number of Days' Sales Uncollected