If the Average Accounts Receivable That a Firm Holds Decreases

question 80

Multiple Choice

If the average accounts receivable that a firm holds decreases without any decrease in credit sales,the operating cycle will:

• A) stay the same because of no sales change.
• B) stay the same because cash collections are sooner, and it will affect the cash cycle only.
• C) decrease because days' sales outstanding decreases.
• D) stay the same because accounts receivable are not in the operating cycle.
• E) have an unknown effect.

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