Accounting for IGCSE & O level - Advanced Principles (Section 6 - No. 24)
What is the impact of an increase in the trade receivables collection period?
The collection period is longer than expected
Increase in credit sales
Increase in profitability
The business has a better credit rating.
Paliwanag
If a company increases its trade receivables collection period, it is taking longer to collect its debts.