The longer it takes to collect accounts receivable,the greater the opportunity cost incurred.

Question

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Opportunity cost refers to the potential benefits that are foregone when choosing one option over another. In the case of accounts receivable, the longer it takes to collect them, the longer the business has to wait to receive the money owed to them. This can result in missed opportunities to reinvest that money in the business, pay bills or debts, or generate additional revenue. Therefore, the greater the time taken to collect accounts receivable, the greater the opportunity cost incurred.

The Longer It Takes to Collect Accounts Receivable,the Greater the Opportunity