Which of the Following Is Not a Useful Measure of the Quality

question 46

Multiple Choice

Which of the following is not a useful measure of the quality of debtors?

• A) average collection period
• B) the amount owed by the debtor
• C) aging of debtor's accounts
• D) bad debts as a percentage of sales

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Definitions:

Assets

Economic resources controlled by a business, capable of producing value, and are expected to benefit future operations, including cash, inventory, and property.

Creditors' Claims

Rights of lenders to receive payment from a borrower or from a borrower’s assets.

Liabilities

Liabilities represent obligations or debts that a company owes to external parties, which are expected to be settled through the outflow of resources or services.

Assets

Resources owned or controlled by a business or individual, expected to bring future economic benefits.