If trade receivables are collected quickly, it may indicate which of the following?
A) Credit is often granted to poor credit risks.
B) The trade receivables turnover is low.
C) The company is becoming more profitable.
D) The company's credit policies may be overly stringent.

Question

Quizplus · Accepted Answer

If trade receivables are collected quickly, it may indicate that the company's credit policies are overly stringent, as they may be granting credit only to customers with very high creditworthiness, leading to faster collections.

If Trade Receivables Are Collected Quickly, It May Indicate Which