Which of the following would best explain an increase in receivables turnover? a. The company adopted new credit policies last year and began offering credit to customers with weak credit histories. b. Due to problems with an error in its old credit scoring system, the company had accumulated a substantial amount of uncollectible accounts and wrote off a large amount of its receivables. c. To match the terms offered by its closest competitor, the company adopted new payment terms now requiring net payment within 30 days rather than 15 days, which had been its previous requirement.
Which of the following would best explain an increase in receivables turnover? a. The company adopted new credit policies last year and began offering credit to customers with weak credit histories. b. Due to problems with an error in its old credit scoring system, the company had accumulated a substantial amount of uncollectible accounts and wrote off a large amount of its receivables. c. To match the terms offered by its closest competitor, the company adopted new payment terms now requiring net payment within 30 days rather than 15 days, which had been its previous requirement.
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 15P
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Which of the following would best explain an increase in receivables turnover?
a. The company adopted new credit policies last year and began offering credit to customers with weak credit histories.
b. Due to problems with an error in its old credit scoring system, the company had accumulated a substantial amount of uncollectible accounts and wrote off a large amount of its receivables.
c. To match the terms offered by its closest competitor, the company adopted new payment terms now requiring net payment within 30 days rather than 15 days, which had been its previous requirement.
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