Asked by Mitika Mahajan Patil on Jun 20, 2024
Verified
The days' sales uncollected ratio is used to:
A) Measure how many days of sales remain until the end of the year.
B) Determine the number of days that have passed without collecting on accounts receivable.
C) Identify the likelihood of collecting sales on account.
D) Estimate how much time is likely to pass before the amount of accounts receivable is received in cash.
E) Measure the amount of layaway sales for a period.
Cash Receipts
Cash receipts are the total amount of money, including cash and checks, received by a business during a specific period for goods or services provided.
- Comprehend the significance and calculation of the days' sales uncollected ratio and its implications for cash flow and credit management.
Verified Answer
AA
Agustin ArceoJun 25, 2024
Final Answer :
D
Explanation :
The days' sales uncollected ratio is used to estimate how much time is likely to pass before the amount of accounts receivable is received in cash. It helps in analyzing the efficiency of accounts receivable management and identifying any potential collections issues.
Learning Objectives
- Comprehend the significance and calculation of the days' sales uncollected ratio and its implications for cash flow and credit management.
Related questions
A Company Reported Net Sales for Year 1 of $285,000 ...
The Number of Days' Sales Uncollected Is Used To ...
At the End of the Current Period,a Company Reported $725,000 ...
Dividing Ending Inventory by Cost of Goods Sold and Multiplying ...
Zhang Company Reported Cost of Goods Sold of $835,000,ending Inventory ...