To best interpret the accounts receivable turnover ratio, the days in accounts receivable should be compared to the company's:
A)inventory turnover.
B)sales revenue.
C)credit terms.
D)accounts receivable balance.

Question

Quizplus · Accepted Answer

The days in accounts receivable, also known as the average collection period, should be compared to the company's credit terms to assess how efficiently a company is managing its accounts receivable. This comparison helps in understanding whether the company is collecting its receivables in a timely manner relative to the credit terms extended to customers.

To Best Interpret the Accounts Receivable Turnover Ratio, the Days