A decrease in collection efforts will result in an increase in sales volume, an increase in the investment in accounts receivable, an increase in bad debt expenses, and a decrease in collection expenditures.

Question

Quizplus · Accepted Answer

A decrease in collection efforts can lead to more sales as credit terms are relaxed, but it also increases the risk of unpaid debts, leading to higher accounts receivable and bad debt expenses, while reducing collection costs.

A Decrease in Collection Efforts Will Result in an Increase