Smart and Smiley Ltd Has an Average Collection Period of 74

question 78

Multiple Choice

Smart and Smiley Ltd has an average collection period of 74 days.What is the accounts receivable turnover ratio for Smart and Smiley?

• A)4.93
• B)2.47
• C)2.66
• D)1.68

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Definitions:

Preferred Stock

Preferred stock is a type of stock that grants holders certain priorities over common stock, including dividends and asset liquidation, often without voting rights.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Retained Earnings(Deficit)

The accumulated net income of a company minus any dividends paid to shareholders, reflecting the company's earnings reinvested in its operations.

Stock Split

An action by a company to increase the number of outstanding shares by dividing each share, which typically reduces the share price but does not change the overall market capitalization.