The Number of Days' Sales Uncollected

question 179

Multiple Choice

The number of days' sales uncollected:

• A) Is used to evaluate the liquidity of receivables.
• B) Is calculated by dividing accounts receivable by sales.
• C) Measures a company's ability to pay its bills on time.
• D) Measures a company's debt to income.
• E) Is calculated by dividing sales by accounts receivable.

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Definitions:

Modify or Waive

The act of making changes to the conditions or requirements of an agreement, or choosing not to enforce them.

Immediate Repayment

The requirement to pay back borrowed funds or settle a debt without delay, often immediately after the funds are disbursed.

Financial Reporting Flexibility

The discretion allowed to managers in choosing how to report financial performance and position, within the bounds of accounting standards and principles.

Contracts Written

Legal agreements created and documented between two or more parties, outlining specific terms and conditions of their arrangement.