Days' Sales in Receivables Can Be Computed in Two Logical

question 197

Multiple Choice

Days' sales in receivables can be computed in two logical steps. In the second step:

• A) the collection period must be determined.
• B) the average daily sales are computed.
• C) the average daily sales are divided by the average receivables.
• D) the average receivables are divided by the average daily sales.

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Definitions:

Transactions

In finance and business, transactions refer to the exchange or transfer of goods, services, or funds between two or more parties.

Cash Register Sales Tape

A continuous roll of paper used in cash registers to record sales transactions, providing a real-time sales record.

Invoice

A document sent by a provider of a product or service to the purchaser that specifies the amount due for the product delivered or service provided.

Advertising Brochure

A promotional document designed to introduce, explain, and market a company's products or services to potential buyers.