The Collection Period is;
A) the time it takes on average for customers to pay what they owe to a firm.
B) the ratio of accounts receivable to the average sales per day.
C) an indicator of efficiency.
D) all of the above.
E) none of the above.

Question

Quizplus · Accepted Answer

The Collection Period is indeed the time it takes on average for customers to pay what they owe to a firm, which makes it an indicator of the firm's efficiency in managing its receivables. Additionally, it can be related to the ratio of accounts receivable to the average sales per day, as this ratio helps in calculating the average collection period. Therefore, all of the provided options correctly describe aspects of the Collection Period.

The Collection Period Is;