The higher the amount of a company's accounts receivable turnover,
A)the shorter time period it takes to collect a receivable.
B)the more assets a company has tied up in receivables.
C)the longer it takes a company to collect its receivables.
D)the more likely a company will experience cash flow problems.

Question

Quizplus · Accepted Answer

Accounts receivable turnover is a financial ratio that measures how quickly a company collects its outstanding invoices from customers. A higher ratio means that a company collects its receivables more quickly, indicating a shorter time period.

The Higher the Amount of a Company's Accounts Receivable Turnover