The high accounts receivable turnover rate may indicate all of the following except
A)Fast collection of accounts receivables.
B)Greater liquidity.
C)Credit terms that are too tight.
D)Inventory levels are high.

Question

Quizplus · Accepted Answer

The high accounts receivable turnover rate indicates that the company is collecting its receivables quickly, which increases liquidity. It may also suggest that credit terms are appropriate or too lenient. However, it would not indicate that inventory levels are high, as the turnover rate pertains only to accounts receivable management.

The High Accounts Receivable Turnover Rate May Indicate All of the Following