The ________ ratio may indicate poor collections procedures or a lax credit policy.
A) average payment period
B) inventory turnover
C) average collection period
D) quick

Question

Quizplus · Accepted Answer

The average collection period ratio measures how quickly a company is able to collect its accounts receivable. A longer average collection period means that a company is taking longer to collect payment from its customers, which could be indicative of poor collection procedures or a lax credit policy. Therefore, the correct choice is C.

The ________ Ratio May Indicate Poor Collections Procedures or a Lax