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

Question

Quizplus · Accepted Answer

Days' sales uncollected is calculated by multiplying the average accounts receivable by 365 days and then dividing the result by the net credit sales. To calculate the average accounts receivable, one needs to know the receivables turnover. Hence, days' sales uncollected cannot be calculated without first knowing the receivables turnover.

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