The Number of Days' Sales in Receivables

question 137

Multiple Choice

The number of days' sales in receivables

• A) is an estimate of the length of time the receivables have been outstanding
• B) measures the number of times the receivables turn over each year
• C) is credit sales divided by average receivables
• D) is not meaningful and therefore is not used

Recognize the role of similarity in arguments by analogy.

Assess how specific similarities or differences affect the strength of analogical arguments.

Understand the inductive generalizations implied by arguments by analogy.

Identify possible fallacies in arguments by analogy.

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Definitions:

Accrual Basis

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash transaction happens.

GAAP Constraint

Guidelines that restrict or limit certain accounting practices under Generally Accepted Accounting Principles, to ensure fairness, consistency, and accuracy in financial reporting.

Disbursement Basis

Accounting method where expenses are recorded when cash is paid out, rather than when incurred.

CICA Handbook

The comprehensive guide published by the Canadian Institute of Chartered Accountants detailing accounting practices and standards in Canada.