What Relationship Exists Between the Average Collection Period and Accounts

question 14

Multiple Choice

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

• A) There is a direct and proportional relationship.
• B) Both ratios are expressed in number of times receivables are collected per year.
• C) Both ratios are expressed in number of days.
• D) As average collection period increases (decreases) the accounts receivable turnover decreases (increases).

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Definitions:

Enforceable Rules

Regulations or principles, established by legal authority, which are binding and subject to enforcement through legal proceedings.

Commercial Relationships

Refers to the interactions and legal ties between businesses or entities engaged in commercial activities.

Private Law

That part of a legal system that governs relations between individuals, such as contracts, property, and family law, as opposed to public law which deals with relationships between individuals and the state.

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A retail establishment that specializes in selling computer hardware, software, and related accessories and services.