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 continues to buy merchandise.
C) should not greatly exceed the discount period.
D) should not greatly exceed the credit term period.

Question

Quizplus · Accepted Answer

The average collection period should ideally not greatly exceed the credit term period, as this indicates that the company is collecting its receivables within the terms set by its credit policies. Exceeding this period significantly could indicate issues with cash flow or credit management.

A General Rule to Use in Assessing the Average Collection