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NEW QUESTION: 1
Which of the following represents an entity's average gross receivables balance?
I. Days' sales in receivables x accounts receivable turnover.
II. Average daily sales x average collection period.
Net sales/average gross receivables.
A. II and III only.
B. II only.
C. I only.
D. I and II only.
An entity's average gross receivables balance can be calculated by multiplying average daily sales by the average collection period days' sales outstanding). Alternatively, annual credit sales can be divided by the accounts-receivable turnover net credit sales/average accounts receivable) to obtain the average balance in receivables.
NEW QUESTION: 2
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