How Would You Interpret an Interval Measure of 50 Days

question 47

Multiple Choice

How would you interpret an interval measure of 50 days?

• A)It takes 50 days on average to collect receivables
• B)Inventory is converted into sales every 50 days
• C)The firm can pay its expenses for at least 50 days
• D)Assets are converted into sales every 50 days

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Definitions:

Net Income

The net income of a business once all taxes, costs, and expenses have been deducted from the total revenue.

Debit Capital Balance

Occurs when the sum of debits in a capital account exceeds the sum of credits, indicating the amount invested by the owners into the business.

Partnership Liquidation

The process of closing a partnership business, including selling off assets, paying off debts, and distributing the remaining assets to the partners.

Personal Assets

Assets owned by an individual as opposed to assets owned by businesses or corporations, including properties, account balances, and personal belongings.