A general rule to use in assessing the collection period is that
A) it should not exceed 30 days.
B) it can be any length as long as the customer continues to buy merchandise.
C) it should not greatly exceed the discount period.
D) it should not greatly exceed the credit term period.

Question

Quizplus · Accepted Answer

The collection period should ideally not greatly exceed the credit term period, as this ensures that payments are received in a timely manner relative to the credit terms set by the company. Extending the collection period far beyond the credit terms can lead to cash flow issues.

A General Rule to Use in Assessing the Collection Period