Which one of the following would tend to create an unexpected increase in a firm's average collection period?
A)Increased credit sales
B)The implementation of a cash discount
C)Increased customer delinquencies
D)Increased dollar value per each sale
E)Increased collection efforts

Question

Quizplus · Accepted Answer

Increased customer delinquencies would result in longer waiting periods before the firm can collect payments, thus increasing the average collection period. Options A, B, D, and E either do not affect the average collection period or would likely result in a decrease in the average collection period.

Which One of the Following Would Tend to Create an Unexpected