The accounts receivable balance does not equal over ____ months of production.

Question

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The accounts receivable balance typically represents the amount of money owed to a company for products or services that have been delivered but not yet paid for. Therefore, it is expected that the accounts receivable balance should not exceed the amount of revenue generated from a few months of production. A balance that equals or exceeds six months of production would indicate significant issues with collecting payments from customers or improper management of credit and collections policies. Therefore, the best choice is B, which indicates that the accounts receivable balance should not exceed three months of production.

The Accounts Receivable Balance Does Not Equal Over ____ Months