A collection period of 50 days is good for a retailer that offers 30-day credit arrangements.

Question

Quizplus · Accepted Answer

A collection period of 50 days means that customers are taking 50 days on average to pay their bills, which is much longer than the 30-day credit arrangement offered by the retailer. This indicates poor management of receivables and may lead to cash flow issues for the retailer. A good collection period would be closer to 30 days or less.

A Collection Period of 50 Days Is Good for a Retailer