Which of the Following Is Not a Useful Measure of the Quality

question 16

Multiple Choice

Which of the following is not a useful measure of the quality of accounts receivable?

• A)Bad debts as a percentage of sales.
• B)The amount owed by the debtor.
• C)Average collection period.
• D)Aging of debtors' accounts.

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Definitions:

Balance Sheet

A financial statement that shows the assets, liabilities, and shareholders' equity of a company at a specific point in time, providing a snapshot of a company's financial condition.

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Common Stock

Certificates issued by a corporation to investors as proof of their ownership rights; an account representing the ownership rights of investors in a corporation; a class of stock issued by a corporation that bears no preference rights.

Market Price

The amount at which an asset or service could be bought or sold in a current transaction between willing parties.