Answered: Explain why speeding up the collection…

Business

Accounting

Explain why speeding up the collection of accounts receiv-able provides only a one-time increase in cash receipts.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 9GI

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Question

Explain why speeding up the collection of accounts receiv-
able provides only a one-time increase in cash receipts.

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

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