The Average Collection Period Is Computed by Dividing

question 172

Multiple Choice

The average collection period is computed by dividing

• A)net credit sales by average gross accounts receivable.
• B)net credit sales by ending gross accounts receivable.
• C)the accounts receivable turnover by 365 days.
• D)365 days by the accounts receivable turnover.

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Definitions:

Limited Liability

Limited Liability is a legal structure that limits an owner's or shareholder's personal liability for a company's debts and obligations.

General Partners

Members of a partnership who are responsible for the management of the partnership, have full authority to bind it, and face unlimited personal liability for its debts.

Limited Partners

Individuals in a partnership who invest money but do not have management responsibilities and whose liability is limited to the amount of their investment.

Foreign Limited Partnership

A partnership entity in which some owners have limited liability and limited involvement in management, recognized under the jurisdiction other than where it operates.