The Number of Days' Sales Uncollected Is Determined by Dividing

question 30

Multiple Choice

The number of days' sales uncollected is determined by dividing

• A) the number of days in a year by the receivable turnover.
• B) the number of days in a year by average accounts receivable.
• C) net income by average accounts receivable.
• D) sales by average accounts receivable.

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Definitions:

External Users

Individuals or entities outside of a company who use its financial information, typically for analysis, investment, or regulatory purposes.

Sole Owner

An individual who exclusively owns a business, bearing all the risks and entitled to all the profits.

Personal Automobile

A privately owned vehicle used for personal transportation, not for business or commercial purposes.

Business Entity Concept

The accounting principle that separates the transactions of a business from those of its owners or other businesses.