The Average Collection Period for Accounts Receivable Is Computed by Dividing

question 71

Multiple Choice

The average collection period for accounts receivable is computed by dividing 365 days by

• A) net credit sales.
• B) average accounts receivable.
• C) ending accounts receivable.
• D) accounts receivable turnover.

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Definitions:

Financial Planning Model

A systematic tool or process used by businesses to forecast their financial performance and plan future financial activities.

Pro Forma Statements

Financial statements that project the future financial performance of a company, often used in planning and capital raising.

Aggregated Statements

These are financial statements that combine the financial data of several segments, subsidiaries, or different time periods of an organization into a single, comprehensive financial statement.