Which of the Following Statements Regarding the Receivables Turnover Ratio

question 45

Multiple Choice

Which of the following statements regarding the receivables turnover ratio is true?

• A)The receivables turnover ratio indicates how many times,on average,the process of selling to and collecting from customers occurs during the accounting period.
• B)Companies of similar size in different industries tend to have similar receivables turnover ratios.
• C)A high turnover ratio may suggest the company is allowing too much time for customers to pay.
• D)The days to collect ratio is found by dividing the receivables turnover ratio by 365 days.

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Definitions:

Organ Reserve

The capacity of organs to function beyond the basal levels necessary to meet daily physiological needs, allowing the body to tolerate and recover from stress or illness.

Homeostasis

The process by which organisms maintain a stable internal environment despite changes in external conditions.

Senescence

The gradual deterioration of functional characteristics in organisms that leads to aging and increased mortality.