Which of the following statements is FALSE?
A)Because accounts receivable days can be calculated from the firm's financial statement, outside investors commonly use this measure to evaluate a firm's credit management policy.
B)Seasonal sales patterns may cause the number calculated for the accounts receivable days to change depending on when the calculation takes place.
C)The ageing schedule is also sometimes augmented by analysis of the payments pattern, which provides information on the percentage of monthly sales that the firm collects in each month after the sale.
D)If the ageing schedule gets 'top-heavy'-that is, if the percentages in the upper half of the schedule begin to increase-the firm will likely need to revisit its credit policy.

Question

Quizplus · Accepted Answer

The statement is false because if the ageing schedule gets 'top-heavy', it indicates that more receivables are current or not overdue, which is generally a positive sign and may not necessarily require revisiting the credit policy.

Which of the Following Statements Is FALSE