A Collection Period Equals _____

question 51

Multiple Choice

A collection period equals _____.

• A)[(accounts receivable)/(net sales)] x 365
• B)(accounts receivable)/(net sales)
• C)[(current assets)/net sales)] x 365
• D)[(cash)+ (accounts receivable)/(net sales)] x 365

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Definitions:

Unpaid Debts

Financial obligations that have not been settled or paid by the due date.

Collection Practices

Procedures and methods used by businesses to recover debts from customers.

Fair Debt Collection Practices Act

A U.S. federal law that aims to protect consumers from abusive, deceptive, and unfair debt collection practices.

Credit Costs

The expenses associated with borrowing money, including interest rates and fees.