Accounting for IGCSE & O level - Advanced Principles (Section 4 - No. 1)
What does a longer trade receivables collection period suggest about a business?
It is collecting cash from customers more quickly.
It has strong cash reserves.
It has a problem with credit control.
It is experiencing high sales growth.
Explanation
A longer collection period suggests that a business is taking longer to collect its debts, possibly indicating problems with credit control.