All of the Following Are True of the Number of Days

question 186

Multiple Choice

All of the following are true of the number of days' sales uncollected ratio except:

• A) Can be used for comparisons to other companies in the same industry.
• B) Is most effective in evaluating the cash sales of a company.
• C) Can be used for comparisons between current and prior periods.
• D) Reflects the liquidity of receivables.
• E) Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.

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Definitions:

Rational Choice Theory

A framework for understanding economic and societal behavior, positing that individuals act based on their preferences and rational calculations to maximize benefit or utility.

Interacting Individuals

Interacting individuals refer to the process where two or more people communicate or affect each other’s behavior and thoughts.

Benefits

Various forms of support, often from the government, in the form of cash or services, intended to ensure the welfare and protection of citizens or employees.

Rational Choice

A theory in economics and sociology that explains decisions by individuals as based on the attempt to maximize personal advantage, minimizing disadvantages.