A Company Must Have a Days' Sales Uncollected Ratio of Less

question 14

True/False

A company must have a days' sales uncollected ratio of less than 30 days to conclude that is has sufficient liquidity.

---

Definitions:

Reversing Entries

are journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries from the end of the previous period.

Reversing Entries

Journal entries that are made at the beginning of an accounting period to reverse or cancel out adjusting journal entries made at the end of the previous accounting period.

Assets

Resources owned by a company that have economic value and can provide future benefits.

Liabilities

Liabilities are financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.