The Statement Concerning the Receivables Turnover Ratio That Is True

question 35

Multiple Choice

The statement concerning the receivables turnover ratio that is true is:

• A)It is calculated as total sales divided by average receivables
• B)A change in the ratio from 2.8 times to 3.1 times is an unfavourable change
• C)It is a measure of how many times the average receivables balance is converted into cash in a year
• D)If the receivables turnover ratio is divided into 365 this gives the average number of days it takes to sell receivables

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Definitions:

Routine Claims

Standard requests or complaints made by customers regarding products or services.

Accusatory Tone

A manner of speaking that implies blame or holds someone responsible for something in a negative way.

Persuasive Claims

Statements designed to convince or influence an audience to accept a particular viewpoint or take a specific action.

Exaggerated Language

Using hyperbolic expressions or claims not meant to be taken literally, in order to create a strong impression.