Which formula accurately represents the collection loss rate as a percentage?

The correct formula for representing the collection loss rate as a percentage is derived from the relationship between the actual collection loss and the total rents that are billable. The collection loss signifies the amounts that were expected to be collected but were not received. Therefore, when calculating the collection loss rate, it's essential to relate this loss to the total amount of rents that were supposed to be billed, as this gives the context of potential earnings.

Using the formula collection loss divided by rents billable allows for the calculation of the percentage of revenue that was lost compared to what could have been collected. This is crucial in assessing the performance of rent collection efforts and identifying trends in financial management regarding leased properties.

In contrast, other options either do not provide the correct basis for assessing losses against a relevant total or misrepresent the relationship between these metrics. For instance, comparing collection loss to rents collected is not appropriate because it does not account for the amounts that were billed but not collected. Similarly, calculating rent billable divided by collection loss would yield a ratio that does not represent a percentage of loss, thus failing to inform about the efficiency of the collection process. Finally, relating rents collected to total rents also does not reflect the losses incurred, as it focuses solely on amounts collected rather