If the Accounts Receivable Turnover Ratio Increases, the Number of Days

question 38

True/False

If the accounts receivable turnover ratio increases, the number of days it takes to collect the receivables also increases.

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Definitions:

Total Cost

The sum of all costs associated with producing or acquiring an item or service, including direct and indirect expenses.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to fixed costs and profit.

Sales Volume

The quantity of products or services sold by a business within a specific period.

Contribution Margin

The difference between sales revenue and variable costs, representing the portion of sales revenue that contributes to covering fixed costs and generating profit.