A general rule to use in assessing the average collection period is that it
A)should not exceed 30 days.
B)can be any length as long as the customer eventually pays his account.
C)should not greatly exceed the discount period.
D)should not greatly exceed the credit period.

Question

Quizplus · Accepted Answer

The average collection period should not greatly exceed the credit period because it indicates how efficiently a company is managing its accounts receivable. A significantly longer collection period than the credit term may suggest issues with cash flow or credit management.

A General Rule to Use in Assessing the Average Collection