An increasing average receivables collection period indicates
A) the firm is generating more income.
B) accounts receivable are going down.
C) the company is becoming more efficient in its collection policy.
D) the company is becoming less efficient in its collection policy.

Question

Quizplus · Accepted Answer

An increasing average receivables collection period indicates that the company is taking longer to collect payments from its customers, which means that the company is becoming less efficient in its collection policy. This can lead to cash flow problems and may require the company to take measures to improve their collection procedures.

An Increasing Average Receivables Collection Period Indicates