The quality of a firm's accounts receivables is the credit standing of the firm's customers, coupled with the customers' ability to repay their credit obligations.

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The statement is true. The creditworthiness and repayment ability of a company's customers impact the quality of the firm's accounts receivable. A firm with customers who have a good credit score and a history of timely payments have a higher quality accounts receivable compared to a firm with customers who have a poor credit score and a history of late payments or nonpayment.

The Quality of a Firm's Accounts Receivables Is the Credit