Which of the Following Factors Are Used to Compute the Number

question 67

Multiple Choice

Which of the following factors are used to compute the number of days' sales in accounts receivable?

• A) Inventory turnover and 365 days
• B) Accounts receivable turnover and 365 days
• C) Net sales and average inventory
• D) Average accounts receivable and cost of goods sold

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Definitions:

Negative Effects

Adverse outcomes or impacts that result from an action, event, or policy.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.

Capital Project

A long-term investment undertaken to build, add or improve on a capital asset such as buildings or infrastructure, with the expectation of enhancing value.

Sunk Costs

Costs that have already been incurred and cannot be recovered or refunded.