Days Inventory Is a Measure Of

question 27

Multiple Choice

Days inventory is a measure of:

• A)market performance
• B)the average length of time it takes to sell inventory
• C)profitability
• D)the average length of time it takes to collect money due from debtors

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Definitions:

Writing Off

The process of acknowledging that a portion of a debt or an asset has become uncollectible or worthless and removing it from the financial statements.

Income Statement

A summary of the revenue and expenses for a specific period of time, such as a month or a year.

Contra Asset

An account on a company's balance sheet that reduces the total amount of the asset accounts, often used to account for depreciation or allowances for bad debts.

Uncollectible Receivables

Financial claims that are recognised as losses because they cannot be collected, typically due to debtor default.