If the Accounts Receivable Turnover for the Current Year Has

question 70

True/False

If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding year, there has been an acceleration in the collection of receivables.

---

Definitions:

Indirect Method

A method for creating the cash flow statement that involves modifying net income based on balance sheet account variations to compute the operating activities' cash flow.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Accrued Liabilities

Expenses that have been incurred but not yet paid, recognized on the balance sheet for financial reporting purposes.

Quality Of Income Ratio

A ratio that indicates the proportion of income that has been realized in cash and thus gives an idea of the company's cash flow condition.