A high average collection period may indicate:
A)management's willingness to quickly write-off questionable receivables.
B)customers are paying for purchases quickly.
C)a strict collection policy.
D)None of the above

Question

Quizplus · Accepted Answer

A high average collection period indicates that customers are taking a longer time to pay for their purchases, which could be due to various reasons such as financial difficulties or lenient credit policies. However, it does not necessarily indicate management's willingness to write-off questionable receivables or a strict collection policy.

A High Average Collection Period May Indicate