If Accounts Receivable Are Collected More Rapidly, the Average Collection

question 44

True/False

If accounts receivable are collected more rapidly, the average collection period (days sales outstanding)is reduced.

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Definitions:

Entity Method

A consolidation approach in financial accounting where the parent and subsidiary's financial statements are combined as if they were a single entity.

Gross Margin

The difference between revenue and cost of goods sold, which shows the profitability of a company's core activities.

Inventory

The total value of all the goods that a company has in stock and intends to sell.

Non-Controlling Interest

The share of a subsidiary's equity that is not, either directly or indirectly, credited to the parent company.