Collecting receivables faster will shorten the cash cycle.

Collecting Receivables

Collecting receivables involves the process or steps taken by a business to ensure that payments are received from customers for goods or services provided on credit.

Cash Cycle

The period of time between a company's purchase of inventory and the receipt of cash from accounts receivable.

Assess the role of credit policies in shaping cash flows and the cycle of cash turnover.

Verified Answer

Marissa HinojosJul 20, 2024

Final Answer :

True

Explanation :

Shortening the time it takes to collect receivables increases the speed at which cash is returned to the business, thus shortening the cash cycle.

Learning Objectives

Assess the role of credit policies in shaping cash flows and the cycle of cash turnover.

Collecting receivables faster will shorten the cash cycle.

Definitions

Learning Objectives

Learning Objectives

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