When Evaluating the Days' Sales Uncollected Ratio, Generally the Less

question 174

True/False

When evaluating the days' sales uncollected ratio, generally the less time that money is tied up in receivables the better.

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Definitions:

Total Period Cost

The sum of all expenses associated with operating a business during a specific accounting period.

Absorption Costing

An accounting method that includes all manufacturing costs (direct and indirect) in the cost of a product.

Total Period Cost

The sum of all costs, both fixed and variable, incurred during a specified period of time, excluding product manufacturing costs.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product cost.