Final answer:
Company A, with a shorter Average Collection Period compared to Company B, is more efficient in collecting receivables. A shorter collection period typically indicates a higher Accounts Receivable Turnover. Comparing revenue generation efficiency would require additional information not provided by the Average Collection Period.
Step-by-step explanation:
If Company A has a shorter Average Collection Period than Company B, the statement that is true regarding these two companies is that Company A is more efficient in collecting receivables from customers than Company B.
The Average Collection Period is an indicator of how quickly a company can convert its accounts receivables into cash.
A shorter Average Collection Period suggests that Company A collects debts from customers more rapidly than Company B, implying more efficient credit and collections processes. Statement 2 reflects this scenario accurately.
Regarding the other options: Statement 1 suggests that Company A has a lower Accounts Receivable Turnover than Company B, which is not supported by the information provided.
In fact, typically, a shorter Average Collection Period would indicate a higher Accounts Receivable Turnover, meaning that Company A is likely to have a higher turnover rate.
Lastly, Statement 3 about Company A being more efficient in generating revenue than Company B cannot be deduced strictly from information about the Average Collection Period, as it relates to the ability to collect receivables, not the ability to generate sales or revenue.