Which Statement Concerning the Receivables Turnover Ratio Is True

question 44

Multiple Choice

Which statement concerning the receivables turnover ratio is true?

• A) It is calculated as total sales divided by average receivables.
• B) A change in the ratio from 4.1 times to 3.5 times is a favourable change.
• C) It is a measure of how many times the average receivables balance is converted into cash during 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:

Endothelial Cells

Cells that line the interior surface of blood vessels and lymphatic vessels, forming an interface between circulating blood or lymph in the lumen and the rest of the vessel wall.

Basic Animal Tissues

The main types of tissues in animals, including epithelial, connective, muscle, and nervous tissues.

Epithelial

Pertaining to the epithelium, a layer of cells covering the body surfaces, lining hollow organs, and forming glands.

Nervous

Relating to the nervous system, which is the network of nerve cells and fibers that transmits nerve impulses between parts of the body.