Days' sales uncollected cannot be calculated without first knowing the receivable turnover.

Question

Quizplus · Accepted Answer

Days' sales uncollected is calculated by dividing the average accounts receivable by the average daily sales. However, the average accounts receivable used in this formula is calculated by dividing the total sales on credit by the receivable turnover. Therefore, receivable turnover is required to calculate days' sales uncollected.

Days' Sales Uncollected Cannot Be Calculated Without First Knowing the Receivable