If the Average Accounts Receivable That a Firm Holds Decreases

Multiple Choice

If the average accounts receivable that a firm holds decreases without any decrease in credit sales,the operating cycle will:

A) stay the same because of no sales change.
B) stay the same because cash collections are sooner, and it will affect the cash cycle only.
C) decrease because days' sales outstanding decreases.
D) stay the same because accounts receivable are not in the operating cycle.
E) have an unknown effect.