Asked by Franchezka Mendoza on Jul 18, 2024
Verified
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
MH
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.
Related questions
Changing Credit Terms to Require Payment in 30 Days Rather ...
Offering a Larger Discount for Cash Sales Will Likely Increase ...
Granting Discounts for Cash Sales Will Tend to Decrease the ...
Loosening the Standards for Granting Credit to Customers Will Tend ...
Increasing the Finance Charges Applied to All Customer Balances Outstanding ...