Question

g The ____ is the average length of time to convert the firm's receivables into cash. Select one: a. payables deferral period b. receivables collection period c. cash conversion period d. inventory conversion period

Answer 1

Answer:

b. receivables collection period

Explanation:

The receivables collection period is a financial ratio used to measure how effectively and quickly a company extends credit sales to customers and collects cash from such sales.

It is computed by dividing the average accounts receivable balance by total net credit sales and multiplying result by the number of days in the period.

Answer 2

Answer: D inventory conversion period

Explanation:

Inventory conversion period reports us about the average time to convert our total inventory into sales. It is relationship between total days in year and inventory turnover ratio. In other words, it measures the length of time on average between the acquisition and sale of merchandise.