Final answer:
There is no strict percentage, as optimal accounts receivable levels vary by industry and individual business practices; businesses should maintain levels that promote healthy cash flow and minimize bad debt.
Step-by-step explanation:
When assessing the relationship between accounts receivable and gross revenue, it's important to recognize that there is no one-size-fits-all percentage that businesses should adhere to, as this can vary greatly depending on the industry and the specific credit policies of a company. However, typically, companies should ensure that accounts receivable do not represent an excessively high percentage of gross revenue to maintain healthy cash flow.
While the options provided (A) 1.5%, (B) 5%, (C) 10%, and (D) 12.5% suggest specific benchmarks, financial management best practices typically do not stipulate a specific percentage as a limit for accounts receivable. Ideally, businesses aim to keep accounts receivable as low as practical to enhance cash flow and minimize the risk of bad debt. It would be prudent for a business to establish industry-tailored benchmarks and to continually evaluate them in the context of their own financial performance and the prevailing economic conditions.