Final answer:
Merchandise inventory is generally converted to cash more quickly than accounts receivable because inventory is sold and paid for, while accounts receivable are payments that need to be collected.
Step-by-step explanation:
Merchandise inventory is generally converted to cash more quickly than accounts receivable. Merchandise inventory refers to the goods that a company has purchased and is planning to sell. When a company sells its inventory, it receives cash as payment.
On the other hand, accounts receivable refers to the money owed to a company by its customers for goods or services provided on credit. While companies generally expect to receive payment for accounts receivable, it can take time for customers to make their payments, resulting in a delay in converting accounts receivable into cash.
Therefore, merchandise inventory is typically converted to cash more quickly than accounts receivable.