If business conditions are stable, an increase in the number of accounts receivable turnover from one year to the next (based upon a company's accounts receivable at year-end)might indicate:
A)a stiffening of the company's credit policies.
B)a significant decrease in the volume of sales of the second year.
C)that the second year's sales were made at lower prices than the first year's sales.
D)that a longer discount period and a more distant due date were extended to customers in the second year.
E)None of these choices are correct.

Question

Quizplus · Accepted Answer

An increase in the number of accounts receivable turnover indicates that the company is collecting its receivables more quickly. This could be due to a stiffening of the company's credit policies, meaning they are being stricter about how and when they extend credit to customers, leading to faster collections.

If Business Conditions Are Stable, an Increase in the Number