$16$

Multiple Choice $5$ points

Jumping Jack collects its accounts receivable in less than $15$ days on average. When interpreting this ratio, which of the following should be considered?

Any accounts receivable collection period lower than one month $(30$ days$)$ should automatically be considered good.

Over three quarters of the sales are made in stores and retail sales are often paid for with cash or credit card. Therefore, we should expect the accounts receivable collection period to be lower.

The average collection period $($days sales in accounts receivable$)$ is not very useful because it is calculated using the balance in accounts receivable on a specific day.

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