Which of the following ratios increases when cash is collected on an account receivable?
A)Current.
B)Quick.
C)Return on assets.
D)Receivable turnover ratio.

Question

Quizplus · Accepted Answer

The receivable turnover ratio measures how quickly a company collects its accounts receivable. A higher receivable turnover ratio means that the company is collecting its accounts receivable more quickly, which indicates better management of its cash flow. Therefore, when cash is collected on an account receivable, the receivable turnover ratio increases.

Which of the Following Ratios Increases When Cash Is Collected