Which one of the following statements is correct if a firm has an accounts receivable turnover...

Which one of the following statements is correct if a firm has an accounts receivable turnover measure of 10?

It takes the firm 36.5 days to pay its creditors.

It takes the firm 36.5 days to sell its inventory and collect payment from the sale.

It takes the firm 36.5 days to collect payment for a sale.

The firm has 10 times more in accounts receivable than it does in cash.

It takes an average of 10 days to collect payment from the firm's customers.

Solutions

Expert Solution

Option C is correct

It takes the firm 36.5 days to collect payment for a sale. (=365/Accounts Receivable turnover=365/10)

jeff jeffy answered 2 years ago

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