Which of the Following Items Is a Measure of a Company's

question 157

Multiple Choice

Which of the following items is a measure of a company's ability to collect receivables?

• A) inventory turnover ratio
• B) current ratio
• C) days' sales in receivables
• D) account receivable balance

---

Definitions:

Minimize

To reduce something to the smallest possible level or amount.

Profits

The financial gains obtained when revenues exceed the costs and expenses incurred to operate the business.

Total Costs

The sum of all costs incurred by a business in producing a certain amount of goods or services.

Variable Costs

Costs that change in proportion to the level of goods or services a business produces.