Which of the Following Is TRUE of Days' Sales in Receivables

question 145

Multiple Choice

Which of the following is TRUE of days' sales in receivables?

• A) Days' sales in receivables measures how many days it takes to order and receive inventory.
• B) Days' sales in receivables measures how frequently during the year the accounts receivable are collected.
• C) Days' sales in receivables measures how many days it takes to sell inventory.
• D) Days' sales in receivables measures how slowly the inventory is depreciated.

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Definitions:

Equity Growth Fund

A mutual fund that invests primarily in stocks with the goal of capital appreciation rather than income.

Sector Fund

A mutual fund that invests solely in businesses operating in a specific industry or economic sector, aiming to capture sector-specific growth.

Equity Trusts

Investment funds that hold a diversified portfolio of equities or stocks, managed by a trustee for the benefit of its beneficiaries.

Mortgage Trusts

Investment funds or trusts that pool investments in mortgage loans or mortgage-backed securities.