Dividing Accounts Receivable, Net by Net Sales and Multiplying the Result

question 166

Multiple Choice

Dividing Accounts receivable, net by Net sales and multiplying the result by 365 is the:

• A) Accounts receivable turnover ratio.
• B) Profit margin.
• C) Days' sales uncollected.
• D) Average accounts receivable ratio.
• E) Current ratio.

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Definitions:

Creditors

Entities or individuals to whom money is owed by a debtor because they have provided goods, services, or loans.

Shares

Units of ownership interest in a company or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Dividends

Dividends are payments made by a corporation to its shareholder members, reflecting a portion of the corporate profits allocated for distribution.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, are subtracted from total revenue.