Asked by Walter Clark on May 04, 2024
Verified
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.
Accounts Receivable Turnover
A financial metric that measures how many times a company collects its average accounts receivable balance within a specific period.
Preceding Year
Refers to the year that immediately comes before the current year.
- Identify and describe the relevance of numerous financial ratios in determining a business's fiscal soundness.
- Recognize the implications of changes in financial ratios over time.
Verified Answer
IB
Isabelle BechtolMay 09, 2024
Final Answer :
False
Explanation :
The statement is incorrect. A decrease in the accounts receivable turnover ratio indicates a slowdown in the collection of receivables, not an acceleration.
Learning Objectives
- Identify and describe the relevance of numerous financial ratios in determining a business's fiscal soundness.
- Recognize the implications of changes in financial ratios over time.
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