The Account Receivable Turnover Measures

question 12

Multiple Choice

The account receivable turnover measures:

• A)How long it takes to sell accounts receivable to a factor.
• B)How often,on average,receivables are received and collected during the period.
• C)The relation of cash sales to credit sales.
• D)How long it takes to sell merchandise inventory.
• E)All of the options are correct.

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how many times a company can turn its accounts receivable into cash within a period.

Year 2

A reference to the second year of operation, study, or observation, the specifics of which depend on the context.

Current Ratio

An indicator of how well a company can fulfill its short-term financial obligations within a year, calculated by the division of current assets by current liabilities.

Year 2

A reference to the second year of a company's operations, project timeframe, or any specific period's second year.