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Which of the following is true regarding the Receivables Turnover Ratio? I. It measures the average number of days it takes to collect an account receivable ll. It is calculated as sales divided by accounts receivable. Ill. It measures how many times a business can turn its accounts receivable into cash in a year. IV. It measures how efficiently the company uses accounts receivable to generate earnings. Select one: O a.ll and IV only O b. I, Il and IlII only O c.I and Il only d. l and Ill only. O e. I, II, IlI, and IV

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Answer #1

The receivables turnover ratios indicates how many times, does the collecting from customers occurs during the accounting period. This is calculated by dividing sales by accounts receivable.

Thus the answer is c. I and II only

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