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AICPA CPA-Business Exam - Topic 1 Question 40 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 40
Topic #: 1
[All CPA-Business Questions]

The average collection period for a firm measures the number of days:

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Suggested Answer: A

Choice 'a' is correct. The average collection period for a firm measures the number of days after a typical credit sale is made until the firm receives the payment.

Choice 'b' is incorrect. 'Float' measures the number of days it takes a typical check to 'clear' through the banking system.

Choice 'c' is incorrect. 'Credit period (term)' measures the number of days before a typical account becomes delinquent.

Choice 'd' is incorrect. 'Average days sales in inventory' measures the number of days in the inventory cycle.


by Fletcher at May 08, 2022, 06:11 AM

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Fausto
5 months ago
I thought it was about inventory, but A makes more sense.
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Tracie
6 months ago
C is totally off base, it's all about the payment timeline!
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Merilyn
6 months ago
Wait, are we sure it's not B? Checks can take a while to clear.
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Malcom
6 months ago
Agreed, A is the right answer!
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Karon
6 months ago
It's definitely A, that's how long it takes to get paid after a sale.
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Xochitl
6 months ago
Okay, I've got this. The instructions are clear, and I know exactly what I need to do to change the bulleted list to picture bullets. I feel confident I can get this right.
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Luz
6 months ago
This seems like a straightforward question about the frequency of updating Palo Alto Networks' Command-and-Control signatures. I'll need to think about the typical update cadence for security signatures and what would be most appropriate for this use case.
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