The Days-To-Collect Measure Indicates

question 59

Multiple Choice

The days-to-collect measure indicates:

• A)the number of days an average selling and collecting cycle takes.
• B)the average number of times the firm completes the selling and collecting cycle during the year.
• C)the average number of days for a customer's payment to clear the banking system.
• D)the average number of days before the company receives a customer's payment and uses the cash to re-order merchandise.

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Definitions:

Operating Activity

Activities that relate directly to the business's primary operations, such as sales, expenses, and cash flow from providing goods or services.

Public Accountant

Accountant who provides accounting services to individuals or business firms for a fee.

Accounting Services

Professional services that include bookkeeping, auditing, tax preparation, and financial management advice.

Financing Activities

Transactions that involve raising capital or funds for a company's operations, including debt, equity, and other financial instruments.