Which One of the Following Statements Is NOT True

question 2

Multiple Choice

Which one of the following statements is NOT true?

• A) The accounts receivables turnover ratio measures how quickly the firm collects its credit sales.
• B) One ratio that measures the efficiency of a firm's collection policy is day's sales outstanding.
• C) The more days that it takes a firm to collect on its receivables, the more efficient the firm is.
• D) Day's sales outstanding measures in days, the time a firm takes to convert its receivables into cash.

---

Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of work or materials in terms of fully completed units of output.

Conversion

The process of changing the physical or chemical properties of a material or resource into a new form, often referring to the manufacturing phase where raw materials are transformed into finished goods.

Processing Department

A processing department is a specific division or section within a manufacturing facility where a distinct stage of production is completed, often part of a sequential process in producing a finished good.

Completed

refers to goods or products that have undergone all stages of production and are ready for sale or distribution.