The average accounts receivable balance is a function of both the volume of credit sales and the days sales outstanding.

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The average accounts receivable balance is calculated by dividing the total accounts receivable by the number of days in the period being measured. The total accounts receivable balance is influenced by both the volume of credit sales and the number of days it takes to collect those sales (days sales outstanding). Therefore, the statement is true.

The Average Accounts Receivable Balance Is a Function of Both