AFP
CTP · Question #842
(Topic 9) For days' sales outstanding to be a meaningful method for evaluating the effectiveness of a company's receivable collections, it is usually compared to the:
The correct answer is C. stated credit terms. See the full explanation below for the reasoning.
Question
- (Topic 9)
For days’ sales outstanding to be a meaningful method for evaluating the effectiveness of a company's receivable collections, it is usually compared to the:
Options
- Aoverall level of past due receivables.
- Baccounts receivable turnover ratio.
- Cstated credit terms.
- Dbad debt reserve.
How the community answered
(24 responses)- A13% (3)
- B4% (1)
- C79% (19)
- D4% (1)
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