In Scenario 8-2 above,after analyzing the average collection period ratio,you concluded that
A) Denny has a problem since his number is so low.
B) Denny may have overly restrictive credit policies.
C) Denny has many uncollected accounts receivable.
D) Denny's cash flow will soon be affected since his accounts receivables are not being paid.

Question

Quizplus · Accepted Answer

A low average collection period ratio suggests that Denny's customers are paying their invoices quickly, which may indicate overly restrictive credit policies.

In Scenario 8-2 Above,after Analyzing the Average Collection Period Ratio,you