Which of the following situations depicts the best receivables management?
A)Receivables turnover ratio increases and the days to collect decreases.
B)Receivables turnover ratio increases and the days to collect increases.
C)Receivables turnover ratio decreases and the days to collect increases.
D)Receivables turnover ratio decreases and the days to collect decreases.

Question

Quizplus · Accepted Answer

Good receivables management occurs when the receivables turnover is increasing and the number of days to collect is decreasing.The more frequently that receivables are turning over,the more frequently the receivables are being collected.A lower the days to collect means that a company is collecting its receivables more quickly.

Which of the Following Situations Depicts the Best Receivables Management