Accounts Receivable Turnover Measures

question 38

Multiple Choice

Accounts receivable turnover measures

• A) How long it takes to sell inventory on credit
• B) How often a company converts its average accounts receivable balance into cash during the period
• C) Measures the relationship of cash sales to credit sales
• D) How long it takes to sell inventory on credit and how often a company converts its average accounts receivable balance into cash during the period
• E) How often a company converts its average accounts receivable balance into cash during the period and measures the relationship of cash sales to credit sales

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used to quantify the risk of an investment.

Expected Return

The weighted average of all possible returns from an investment, considering the probabilities of each outcome.

Efficient Market Hypothesis

The theory that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns than the overall market.

Stock Market

A public marketplace for buying, selling, and issuing shares of publicly held companies; facilitates economic transactions and information exchange regarding stock prices and company performance.