MENU
Which of the following represents a firm's average gross receivable balance?
I Days' sales in receivables x accounts receivable turnover.
II Average daily sales x average collection period.
III Net sales average gross receivables.
Suggested Answer: C
Get Premium CPA-Business Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
Choice 'c' is correct. II only - Average daily sales ($27,397) Average collection period (36.5) = $1,000,000 Avg gross A/R
Not I Days' sales in receivables (36.5) AR turnover 10 = 365 days in year.
Not III Net sales ($10,000,000) Avg gross receivables ($1,000,000) = 10 AR turnover.
8 comments · newest first
FI
Filiberto
11 months ago
Totally with you on that, II is crucial!
DO
Doretha
12 months ago
Wait, is III really a thing? Sounds off.
BU
Bulah
12 months ago
Average collection period is key for receivables.
RE
Reid
12 months ago
I disagree, I feel like I and II both matter.
LI
Lili
1 year ago
I think II is definitely part of it.
HO
Horace
1 year ago
From what I remember, a P3O is a virtual and decentralized setup, so I'll choose option C.
HA
Harris
1 year ago
Hmm, I'm a little unsure about this one. I know there's an option to create a new record, but I can't remember if that's "Save and New" or "Save As". I'll have to think this through carefully.
JA
Jacki
1 year ago
I'm a bit confused about the exact format. I know it needs to include the server's IP address, but do we also need to specify a specific path?