According to the text, what is the unique reason that the accounts receivable tu
ID: 2725253 • Letter: A
Question
According to the text, what is the unique reason that the accounts receivable turnover ratio is so widely used in analyzing revenue?
Question 11 options:
significant revenues and receivables will almost always affect this ratio
The accounts receivable turnover ratio is not a widely used ratio in analyzing revenue
it is easy to compute
The data is readily available
significant revenues and receivables will almost always affect this ratio
The accounts receivable turnover ratio is not a widely used ratio in analyzing revenue
it is easy to compute
The data is readily available
Explanation / Answer
A IS RIGHT
significant revenues and receivables will almost always affect this ratio
In many revenue frauds, sales and fictitious receivables are altered.Provided that the accounts receiv-able turnover ratio is not one, these alterations will almost always change the ratio.While answers C and D may also apply to some extent, there are other ratios that are also easy to compute and for which data is readily available.Answer B is obviously incorrect.
significant revenues and receivables will almost always affect this ratio
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