Deegan Industries Has an Accounts Receivable Turnover Rate of 8

question 168

Multiple Choice

Deegan Industries has an accounts receivable turnover rate of 8.Which of the following statements is not true?

• A)Deegan's accounts receivable are more liquid than those of a business whose accounts receivable turnover rate is 5.
• B)Deegan waits approximately 46 days to make collections of its credit sales.(Use 365 days in a year. )
• C)Deegan writes off accounts receivable as uncollectible if they are over 45 days old.
• D)Deegan's net credit sales are about eight times the amount of its average accounts receivable.

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Definitions:

Mortgage Broker

A professional intermediary who helps borrowers find the best mortgage deals by comparing offers from different lenders.

Effective Rate of Interest

The actual rate of interest earned or paid on an investment or loan, accounting for the effect of compounding.

Nominal Interest Rate

The rate of interest before adjustment for inflation, representing the face value of financial transactions.

Per Quarter

A term indicating events or measurements that occur or are calculated every three months.