The level of investment in accounts receivable depends on:
A) credit analysis
B) accounts payable terms
C) number of customers
D) average sale prices

Question

Quizplus · Accepted Answer

The level of investment in accounts receivable depends on credit analysis, which involves evaluating the creditworthiness of customers and determining the likelihood of them paying their bills on time. This analysis helps determine how much credit to extend to customers and how long to allow them to pay their bills, which in turn affects the level of investment in accounts receivable. The other choices (B, C, and D) may also have some impact on accounts receivable, but credit analysis is the most important factor.

The Level of Investment in Accounts Receivable Depends On