The Collection Period is a measurement of the average time it takes a company to collect its accounts receivable and the Average Age of Accounts Payable represents the average time it takes a company to pay its bills. Therefore, which of the following statements is true?

Group of answer choices

When the Average Age of Accounts Payable is much greater than the Collection Period, it may be an indication that the construction company is withholding payments from its suppliers and subcontractors, even after it has received payment for the work.

If the Average Age of Accounts Payable is less than the collection period, the construction company is in the habit of using its working capital to pay bills before it receives payment from the owner.

Both are correct.

Neither are correct.