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:

ACollection Ratio = 365 / Payable Turnover

BCollection Ratio = 365 + Net Income / Receivable Turnover

CCollection Ratio = 365 / Receivable Turnover

DCollection Ratio = 365 + Net Sales / Receivable Turnover

Show Suggested Answer

Suggested Answer: A

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

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Aliza

1 months 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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Ricki

6 days ago

User 2: I think you're right, it's definitely not related to net income or net sales.

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Elly

12 days ago

User 1: I agree, the collection ratio is calculated by dividing 365 by the receivable turnover.

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Remona

2 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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Arlette

5 days ago

B) Collection Ratio = 365 + Net Income / Receivable Turnover

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Jordan

12 days ago

A) Collection Ratio = 365 / Payable Turnover

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Boris

18 days ago

The formula is Collection Ratio = 365 / Receivable Turnover.

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Leandro

1 months ago

Yeah, it's definitely not about net income or net sales.

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Bernardo

1 months ago

I agree, the collection ratio is calculated using the receivable turnover.

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Deandrea

2 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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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

1 months ago

Actually, the correct answer is C) Collection Ratio = 365 / Receivable Turnover

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Oretha

1 months 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

3 months ago

I think the answer is C) Collection Ratio = 365 / Receivable Turnover.

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SOFE Exam SOFA-CFE Topic 9 Question 89 Discussion

Contribute your Thoughts:

Aliza

Ricki

Elly

Remona

Arlette

Jordan

Boris

Leandro

Bernardo

Deandrea

Oren

Johana

Oretha

Naomi

Avery

Naomi