The Number of Days' Sales Uncollected

question 28

Multiple Choice

The number of days' sales uncollected

• A)Measures a company's ability to pay its bills on time
• B)Is calculated by dividing accounts receivable by sales
• C)Is used to evaluate the liquidity of receivables
• D)Measures a company's debt to income
• E)Is calculated by dividing sales by accounts receivable

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Definitions:

Materials Purchased

The raw materials and components bought by a company for use in the production of its goods or services.

Direct Labour Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, used to analyze labor cost efficiency.

Direct Labour Efficiency Variance

The difference between the budgeted amount of direct labor hours needed to produce a certain level of output and the actual hours used.

Cost Variances

Cost Variances are the differences between expected costs and actual costs incurred, analyzed in budgeting and accounting to control expenses.