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:

Alpha

The significance level, a threshold used in hypothesis testing indicating the probability of rejecting the null hypothesis when it is true.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or a statistical calculation.

Sample Size

The number of observations or data points that make up a sample.

Level of Significance

The probability of rejecting the null hypothesis in a statistical test when it is actually true; a measure of how unlikely results are due to chance.