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How Is the Number of Days to Collect Accounts Receivable

question 129

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How is the number of days to collect accounts receivable computed? What information does this ratio provide?


Definitions:

Cash Dividend

A payout from the company's profits, determined by the board of directors, given to certain shareholders as cash.

Trading Securities Portfolio

A collection of marketable securities that a business holds for the purpose of reselling them in the short term to profit from market price changes.

Fair Value

An estimate of the price at which an asset or liability could be traded in an orderly transaction between market participants at the measurement date.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

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