A decreasing average receivables collection period could be associated with
A) increasing account receivable.
B) decreasing sales.
C) increasing sales and decreasing accounts receivable.
D) none of the answers are correct.

Question

Quizplus · Accepted Answer

An decreasing average receivables collection period means that the company is collecting its accounts receivable more quickly, which could be a result of increasing sales and decreasing accounts receivable. Option A is incorrect because an increasing accounts receivable balance would typically result in a longer collection period. Option B is incorrect because decreasing sales would likely result in a longer collection period as well.

A Decreasing Average Receivables Collection Period Could Be Associated with