A decrease in accounts receivable turnover ratio is indicative of:
A)an increase in sales revenue.
B)slower selling inventory.
C)an increase in accounts receivable.
D)a decline in cost of good sold.

Question

Quizplus · Accepted Answer

A decrease in accounts receivable turnover ratio means that the company is taking longer to collect payments from customers, which suggests an increase in accounts receivable. This could be due to various factors such as ineffective credit policies or a decrease in customer credit worthiness, but it is not indicative of an increase in sales revenue or a decline in cost of goods sold. It is also not necessarily related to slower selling inventory.

A Decrease in Accounts Receivable Turnover Ratio Is Indicative Of