If a Company Has an Accounts Receivable Turnover Ratio of 15

question 11

Multiple Choice

If a company has an accounts receivable turnover ratio of 15, the company:

• A) is converting its accounts receivable to cash 15 times per year.
• B) is selling its inventory on 15 days credit terms.
• C) is converting its inventory to accounts receivable in 15 days of production.
• D) collects it receivables 15 times per year.

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Definitions:

Value

The perceived benefit or satisfaction that a consumer receives from a product or service in relation to its cost.

Benefits to Costs

Refers to evaluating the advantages and disadvantages or gains and expenses associated with a decision, project, or purchase.

Needs and Wants

Fundamental human requirements and desires that drive consumption behavior, where needs are essential for survival and wants are additional desires.

Product Improvement

The process of making meaningful changes to a product to increase its usability, functionality or performance.