The Accounts Receivable Turnover

question 184

Multiple Choice

The accounts receivable turnover

• A) Is computed by dividing net credit sales for the accounting period by the cash realizable value of accounts receivable on the last day of the accounting period.
• B) Can be used to compute the average collection period.
• C) Is a method of evaluating the solvency of net accounts receivable.
• D) Is only important to internal users of accounting information.

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Definitions:

Price Elasticity

An indicator of the sensitivity in the quantity of a good demanded when its price fluctuates.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a given period.

Price Change

A variation in the cost of goods or services over time, either increasing or decreasing based on market conditions.

Price Elasticity

Price elasticity measures how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of consumers to price changes.