All of the following statements are true regarding the average collection period except: A)it is a popular variant of the accounts receivable turnover. B)it is used to assess the effectiveness of a company's credit and collection policies. C)it should generally exceed the credit term period. D)its increase may suggest a decline in the financial health of customers.

Question

Quizplus · Accepted Answer

The average collection period should generally not exceed the credit term period, as this would indicate that customers are taking longer to pay than the terms allow, which could be a sign of inefficiency in collections or financial issues with customers.

All of the Following Statements Are true Regarding the Average