Ch. 9 Receivables Part 1 Quiz

Accounts Receivable Turnover measures

how frequently during the year the accounts receivable are converted to cash

The number of days' sales in receivables

is an estimate of the length of time the receivables have been outstanding

A note receivable or promissory note

may be used to settle an accounts receivable.

Receivables are usually listed in order

of liquidity

A note receivable can be sold to a financial institution to secure cash before the maturity date. This type of transaction is called discounting the note receivable.

True

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

True

Notes or accounts receivables that result from sales transactions are often called

trades receivables