The Receivables Turnover Ratio Is Computed by Dividing Net Sales

question 52

True/False

The receivables turnover ratio is computed by dividing net sales by the ending net receivables.

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Definitions:

Progress Billing

A billing method where payments are requested from customers based on the completion percentage of a project or contract.

Long-term Projects

Projects with a duration that extends beyond one year, typically involving large-scale and complex activities.

Direct Write-off Method

An accounting method where uncollectable debts are charged directly to expense as they are identified.

GAAP

Generally Accepted Accounting Principles; a set of accounting standards and procedures used in the U.S. to govern financial reporting.