Which of the following measures the number of days accounts receivable are held before the firm collects cash from the sale?
A)Accounts receivable turnover
B)Average collection period
C)Average payment period
D)Accounts payable turnover

Question

Quizplus · Accepted Answer

The average collection period measures the number of days it takes for a firm to collect cash from the sale of its accounts receivable. A high average collection period can indicate that the firm is having difficulty collecting payment, which can impact its cash flow and overall financial health. The other options listed measure different aspects of a firm's accounts receivable and accounts payable processes.

Which of the Following Measures the Number of Days Accounts