The Days-To-Collect Measures The

question 172

Multiple Choice

The days-to-collect measures the:

• A)number of days it takes to collect accounts receivable.
• B)average number of times the firm completes the selling and collecting cycle during the year.
• C)average number of days for a customer's payment to clear the banking system.
• D)average number of days before the company receives a customer's payment and uses the cash to re-order merchandise.

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Definitions:

Total Reserves

The sum of all deposits, including cash, bank deposits, and investable assets, held by a financial institution or country.

Required Reserves

The minimum amount of reserves a bank must hold, as mandated by regulatory bodies, based on a percentage of the bank's deposit liabilities.

Money Supply

The total quantity of money available in the economy at a given time, including currency, deposits, and other liquid assets.

Required Reserve Ratio

The proportion of deposits that banks are required to hold in reserve and not lend out.