The Days' Sales Uncollected Ratio Is Used To

question 77

Multiple Choice

The days' sales uncollected ratio is used to:

• A)Measure how many days of sales remain until the end of the year.
• B)Determine the number of days that have passed without collecting on accounts receivable.
• C)Identify the likelihood of collecting sales on account.
• D)Estimate how much time is likely to pass before the current amount of accounts receivable is received in cash.
• E)Measure the amount of cash sales during a period.

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Definitions:

Preferred Stock

A class of stock that entitles holders to fixed dividend payments before any distributions are made to common stockholders.

Common Stock

Represents the shares of a company that are owned by its shareholders, which entitle them to vote at shareholder meetings and to receive dividends.

Dividends

Payments made by a corporation to its shareholder members, distributing profits.

Treasury Stock

Shares that were once part of the outstanding shares and have been bought back by the company, reducing the amount of outstanding stock on the open market.