Q154
A higher accounts receivable turnover ratio means__________.
A.
lower debt collection period
AnswerB.
higher debt collection period
C.
lower sales
D.
higher sales
Answer: Option A
Solution
Answer: Option A
Solution:
A higher accounts receivable turnover ratio mean lower debt collection period. Debtor Collection Period indicates the average time taken to collect trade debts. In other words, a reducing period of time is an indicator of increasing efficiency.