How Is the Figure for 'Average Days of Sales' Calculated

question 6

Multiple Choice

How is the figure for 'average days of sales' calculated?

• A) (Average net accounts receivable/Net sales)× 365 days
• B) (Average net accounts receivable × Net sales)/365 days
• C) (Average net accounts receivable/Net sales)/180 days
• D) (Average net accounts receivable/Net sales)× 180 days

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, reflecting its loss of value over time.

Translated Income Statement

An income statement that has been converted from one currency to another, typically involved in the financial reporting of multinational companies.

Gain or Loss

The financial result from a transaction when the selling price of an asset differs from its original purchase price.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset over its useful life.