CIMA Fundamentals of financial accounting BA3 Question # 97 Topic 10 Discussion

CIMA Fundamentals of financial accounting BA3 Question # 97 Topic 10 Discussion

BA3 Exam Topic 10 Question 97 Discussion:
Question #: 97
Topic #: 10

Company A has a receivables turnover ratio of six times, while Company B, which operates in the same market sector, has a receivables turnover ratio of five times.

This suggests that


A.

Company A has a lower level of receivables than Company B and is, therefore, more efficient than Company B.


B.

Company A has a higher level of receivables than Company B and is, therefore, less efficient than Company B.


C.

Company A has a lower level of receivables than Company B and is, therefore, less efficient than Company B.


D.

Company A has a higher level of receivables than Company B and is, therefore, more efficient than Company B.


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