The Average Collection Period Measures

question 35

Multiple Choice

The average collection period measures:

• A)the average time necessary to collect a credit sale.
• B)how long the companies money is invested in their customers.
• C)the days sales outstanding.
• D)All of the above.
• E)None of the above.

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Definitions:

Investments

Assets purchased with the expectation that they will generate income or appreciate in the future.

Financial Statements

Formal records of the financial activities and position of a business, presenting its operations, financial condition, and cash flows.

Consolidated Financial Statements

Financial statements that show the aggregated financial position and results of operations for a parent company and its subsidiaries.

Parent's Control

The influence and authority a parent company holds over its subsidiary's operations and financial decisions.