A company's ratio of net sales (cash and credit sales)to average accounts receivable can be interpreted as management's ability to:

Question

Quizplus · Accepted Answer

The ratio of net sales to average accounts receivable indicates the effectiveness of the company's collection activities. A higher ratio implies that the company is collecting cash from its sales quickly and efficiently, indicating better management of accounts receivable. Therefore, the best choice is A.

A Company's Ratio of Net Sales (Cash and Credit Sales)to