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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Professional Accounting Program

A formal education and training program designed to provide knowledge and skills necessary for accounting careers.

Retail Price

The total cost that consumers pay for a product in retail stores, including markups by retailers.

Wholesale Cost

The price charged by manufacturers or distributors to retailers for products, typically lower than the retail price.

Basic Price Per Meal

The standard cost before any discounts or additional fees, for a single meal offering.