Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

AICPA CPA-Business Exam - Topic 1 Question 40 Discussion

The average collection period for a firm measures the number of days:
A) After a typical credit sale is made until the firm receives the payment.
B) It takes a typical check to 'clear' through the banking system.
C) Before a typical account becomes delinquent.
D) In the inventory cycle.

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:

Show Suggested Answer Hide Answer
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

Limited Time Offer

25%

Off

Get Premium CPA-Business Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Fausto
8 months ago
I thought it was about inventory, but A makes more sense.
upvoted 0 times
...
Tracie
9 months ago
C is totally off base, it's all about the payment timeline!
upvoted 0 times
...
Merilyn
9 months ago
Wait, are we sure it's not B? Checks can take a while to clear.
upvoted 0 times
...
Malcom
9 months ago
Agreed, A is the right answer!
upvoted 0 times
...
Karon
9 months ago
It's definitely A, that's how long it takes to get paid after a sale.
upvoted 0 times
...
Xochitl
9 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.
upvoted 0 times
...
Luz
10 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.
upvoted 0 times
...

Save Cancel