A High Receivables Turnover Ratio Indicates

question 8

Multiple Choice

A high receivables turnover ratio indicates

• A) customers are making payments slowly.
• B) the company's sales are increasing.
• C) a large proportion of the company's sales are on credit.
• D) customers are making payments very quickly.

---

Definitions:

Inventory Items Sold

The total number of product units a company has sold to its customers during a specific period.

Materials Cost

The total expense incurred for the materials that are used in the production of goods or services.

Purchase Order

A document generated by a buyer and sent to a seller specifying products or services to be purchased.

Sales Order

A document created by a seller upon the receipt of an order from a customer, detailing the products or services ordered and the terms of the sale.