The Average Collection Period for Receivables Is Computed by Dividing

question 122

Multiple Choice

The average collection period for receivables is computed by dividing 365 days by

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

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Definitions:

Standard Quantity

A predetermined amount of input that should be used in producing a unit of output.

Standard Costs

Predetermined costs for manufacturing a product or service, used as a benchmark to measure the actual costs of production.

Product Specifications

Detailed descriptions of a product's characteristics, materials, and performance criteria, setting the standards for production and quality.

Union Contract

A legal agreement between a labor union and an employer that outlines the terms of employment, including wages, working hours, work conditions, and grievance procedures.