Question

Which one of the following statements is correct if a firm has a receivables turnover of 36.5? Group of answer choices It takes the firm 36.5 days to collect payment from its customers. It takes the firm an average of 10 days to sell its items. The firm collects on its sales in an average of 10 days. The firm has 36.5 times more in accounts receivable than it does in cash. None of the above.

Answer 1

Answer:

The firm collects on its sales in an average of 10 days

Explanation:

if the receivables turnover is 36.5 it means it colect his accounts 36.5 times per year

we can convert this into a days metric:

the days account is outstanding:

365 days per year / we collect 36.5 per year = 10 days to collect an account on average

The acounts are collected every ten days on average.