Days' Sales in Receivables Measures ________

question 187

Multiple Choice

Days' sales in receivables measures ________.

• A) how many days it takes to order and receive inventory
• B) how many days it takes to collect the average level of accounts receivable
• C) how many days it takes to sell inventory
• D) the number of times a company collects the average accounts receivable balance in one year

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a business.

Fixed Costs

Fixed costs refer to expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Total Costs

The aggregate amount of money spent on producing goods or services, covering both stable and changeable costs.

Economic Profit

The discrepancy between a company's overall income and its combined explicit and implicit expenses.