Asked by James McGee on May 12, 2024
Verified
Which of the following is the best definition of accounts receivable period?
A) The time between receipt of inventory and payment for it.
B) A secured short-term loan that involves either the assignment or factoring of receivables
C) The time between sale of inventory and collection of the receivable.
D) Costs that rise with increases in the level of investment in current assets.
E) A forecast of cash receipts and disbursements for the next planning period.
Accounts Receivable Period
The typical duration for an enterprise to gather owed payments from its customers.
Sale Of Inventory
The process of selling the goods that a business has produced or bought to its customers.
Receipt Of Inventory
The process of acknowledging or taking in goods received, usually marking the physical arrival of stock in a business.
- Acquire knowledge about the concept of accounts receivable financing and its effect on operational business practices.
Verified Answer
SP
Sarita PersaudMay 17, 2024
Final Answer :
C
Explanation :
The accounts receivable period refers to the duration between the sale of inventory and the collection of the receivable, indicating how long it takes for a company to collect payments from its credit sales.
Learning Objectives
- Acquire knowledge about the concept of accounts receivable financing and its effect on operational business practices.