A general rule to use in assessing the average collection period is that it
A) should not exceed 30 days.
B) can be any length as long as the customer continues to buy merchandise.
C) should not greatly exceed the return period.
D) should not greatly exceed the credit term period.

Question

Quizplus · Accepted Answer

The average collection period should not greatly exceed the credit term period, which is the time frame in which the customer is expected to pay their bill. If the average collection period greatly exceeds the credit term period, it could indicate potential cash flow problems for the business.

A General Rule to Use in Assessing the Average Collection