Which of the following is not a valid quantitative measure for accounts receivable collection policies?
A) Average collection period
B) Aging of accounts receivables
C) Ratio of debt to equity
D) Ratio of bad debts to credit sales

Question

Quizplus · Accepted Answer

The ratio of debt to equity is not a valid quantitative measure for accounts receivable collection policies as it pertains to the overall financial structure of the company and not specifically to the effectiveness of accounts receivable collection. The other options, average collection period, aging of accounts receivables, and ratio of bad debts to credit sales, all directly relate to the management and collection of accounts receivable.

Which of the Following Is Not a Valid Quantitative Measure