A Company Has Net Sales of $800,000, a Beginning Balance

question 114

Multiple Choice

A company has net sales of $800,000, a beginning balance of net receivables of $70,000, and an ending balance of net receivables of $90,000. Its days' sales in receivables is:

• A) 110 days.
• B) 41 days.
• C) 36 days.
• D) 32 days.

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Definitions:

Sales Returns and Allowances

Deductions from a company's sales revenue that account for returned goods and discounts or allowances given to customers.

Purchase Discounts

Reductions in the purchase price of goods, services, or assets, usually offered as an incentive for prompt payment.

Sales Returns and Allowances

A reduction in sales revenue due to returned goods or allowances made for damaged or unsatisfactory products.

Freight-In

Costs associated with transporting raw materials or goods into a company from suppliers, considered part of the cost of purchasing inventory.