The ____ measures the promptness with which customers pay their credit obligations.
A)bad-debt loss ratio
B)average collection period
C)credit term
D)cash discount

Question

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The average collection period measures the promptness with which customers pay their credit obligations by calculating how long it takes for the company to collect its accounts receivable. The bad-debt loss ratio measures the percentage of credit sales that are not collectible and result in a loss for the company. The credit term refers to the period of time in which a customer is required to pay their credit obligations. A cash discount is a reduction in price offered to customers who pay their bills within a specified period of time.

The ____ Measures the Promptness with Which Customers Pay Their