An increase in the average collection period may suggest all of the following EXCEPT ____.
A) the company caters to slow-paying customers
B) customers are not paying their bills on time
C) sales have decreased
D) an overly liberal credit policy

Question

Quizplus · Accepted Answer

An increase in the average collection period means that it is taking longer for the company to collect payment from its customers. This could be due to slow-paying customers, customers not paying on time, or an overly liberal credit policy. However, it is not likely that sales have decreased, as lower sales would typically result in a shorter collection period.

An Increase in the Average Collection Period May Suggest All