The Number of Days' Sales Uncollected

question 124

Multiple Choice

The number of days' sales uncollected:

• A)Is used to evaluate the liquidity of receivables.
• B)Is calculated by multiplying accounts receivable by sales.
• C)Measures a company's ability to pay its bills on time.
• D)Measures a company's debt to income.
• E)Is calculated by dividing sales by accounts receivable.

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Definitions:

Equity Method Investment

An accounting technique used by firms to assess the profits earned through their investments in other companies by reporting these profits in proportion to their ownership stake.

Long-Term Investments-AFS

Available-for-Sale Long-term Investments are financial assets not classified as trading or held-to-maturity investments, valued at fair market prices with gains or losses reported in other comprehensive income.

Trading Securities

Financial instruments such as shares, bonds, or other securities that are purchased with the intention of selling them in the short term to profit from price fluctuations.

Debt Securities

Financial instruments representing money borrowed that must be repaid, such as bonds, bills, or notes.