A Very High Accounts Receivable Turnover Would Most Likely Indicate

question 69

Multiple Choice

A very high accounts receivable turnover would most likely indicate that:

• A) net credit sales for the year have been understated
• B) policies for extending credit to customers are too tight
• C) accounts receivable balances have been overstated
• D) the company is unsuccessful in its efforts to collect cash from customers

---

Definitions:

Create Purchase Order

The process of generating a document to officially request goods or services from a supplier, outlining the types, quantities, and agreed prices for products or services.

Make Deposits

The process of adding funds to a bank account, often facilitated by banking or financial software.

Sales on Account

Transactions where goods or services are sold and payment is deferred to a later date, creating accounts receivable.

Create Invoices

The act of generating a document that specifies the amount owed by a customer for goods or services provided.