The higher the accounts receivable turnover, the less quickly accounts receivable are collected.

Question

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This statement is incorrect. The higher the accounts receivable turnover, the more quickly accounts receivable are collected. Accounts receivable turnover measures the efficiency of a company in collecting its outstanding customer invoices. It is calculated as net credit sales divided by the average accounts receivable balance. A high turnover ratio indicates that a company is effectively managing its accounts receivable and collecting payments quickly.

The Higher the Accounts Receivable Turnover, the Less Quickly Accounts