A High Accounts Receivable Turnover Ratio Could Mean That the Company's

question 68

True/False

A high accounts receivable turnover ratio could mean that the company's credit policies may be too stringent.

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Definitions:

Source Documents

Original records that provide evidence that a transaction has occurred, such as receipts, invoices, checks, or bank statements.

Unearned Revenue

Money received by a business for goods or services yet to be provided; it is recorded as a liability until the goods or services are delivered.

Balance Sheet

A financial document showing what a company owns, owes, and the equity of its shareholders at a fixed point in time.

Trial Balance

An accounting table that aggregates all ledger balances into debit and credit columns, ensuring both totals are identical.