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SOFE Exam SOFA-CFE Topic 9 Question 89 Discussion

Actual exam question for SOFE's SOFA-CFE exam
Question #: 89
Topic #: 9
[All SOFA-CFE Questions]

Collection ratio can be calculated by the formula:

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Suggested Answer: A

by Clarinda at Jun 02, 2024, 03:22 PM

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Aliza
22 days ago
As an accountant, I'm offended that anyone would think the collection ratio has anything to do with net income or net sales. It's strictly a function of the receivable turnover.
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Remona
1 months ago
Haha, I almost fell for that one with the 'Net Income' and 'Net Sales' options. But you can't trick me, the collection ratio is all about the receivables!
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Boris
2 days ago
The formula is Collection Ratio = 365 / Receivable Turnover.
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Leandro
18 days ago
Yeah, it's definitely not about net income or net sales.
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Bernardo
20 days ago
I agree, the collection ratio is calculated using the receivable turnover.
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Deandrea
1 months ago
I initially thought it was A, but then I realized that the payable turnover is not relevant to calculating the collection ratio. The key factor is the receivable turnover.
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Oren
1 months ago
The correct answer is C. The formula to calculate the collection ratio is 365 / Receivable Turnover. This makes sense because the collection ratio represents the average number of days it takes to collect accounts receivable.
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Johana
16 days ago
Actually, the correct answer is C) Collection Ratio = 365 / Receivable Turnover
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Oretha
28 days ago
I think the answer is A) Collection Ratio = 365 / Payable Turnover
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Naomi
2 months ago
Hmm, I see your point. Let's discuss it further to figure out the correct answer.
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Avery
2 months ago
I disagree, I believe the correct answer is D) Collection Ratio = 365 + Net Sales / Receivable Turnover.
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Naomi
2 months ago
I think the answer is C) Collection Ratio = 365 / Receivable Turnover.
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