Answer to Question #229524 in Economics for Millicent

Question

What relationship exists between the average collection period and accounts receivable turnover?

Select one:

a. As average collection period increases (decreases) the accounts receivable turnover decreases (increases).

b. Both ratios are expressed in number of days.

c. Both ratios are expressed in number of times receivables are collected per year.

d. There is a direct and proportional relationsh

Answer 1

a. As the average collection period increases (decreases) the accounts receivable turnover decreases (increases).