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If Days' Sales in Receivables Are Materially Longer Than the Credit

question 26

True/False

If days' sales in receivables are materially longer than the credit terms,this indicates a collection problem.


Definitions:

Accountant

An accountant is a professional who performs accounting functions such as audits or financial statement analysis for individuals or businesses.

Plan of Reorganization

A legal document that outlines the process by which a distressed company will restructure its debts and operations to recover from financial hardship.

Chapter 13

A section of the United States Bankruptcy Code that allows individuals earning regular income to develop a plan to repay all or part of their debts.

Liquidated

Pertains to the conversion of assets into cash or the settlement of debts through the sale of assets.

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