Table 15.6
A breakdown of Teffan, Inc.'s outstanding accounts receivable dated June 30, 2014 on the basis of the month in which the credit sale was initially made follows. The firm extends 30-day credit terms.
-An increase in collection efforts by a firm will result in ________ in sales volume, ________ in the investment in accounts receivable, ________ in bad debt expenses, and ________ in collection expenditures.
A) an increase; a decrease; an increase; a decrease
B) an increase; a decrease; a decrease; an increase
C) an increase; a decrease; an increase; an increase
D) a decrease; a decrease; a decrease; an increase

Question

Table 15.6
A breakdown of Teffan, Inc.'s outstanding accounts receivable dated June 30, 2014 on the basis of the month in which the credit sale was initially made follows. The firm extends 30-day credit terms. 
-An increase in collection efforts by a firm will result in ________ in sales volume, ________ in the investment in accounts receivable, ________ in bad debt expenses, and ________ in collection expenditures.
A) an increase; a decrease; an increase; a decrease 
B) an increase; a decrease; a decrease; an increase 
C) an increase; a decrease; an increase; an increase 
D) a decrease; a decrease; a decrease; an increase

Quizplus · Accepted Answer

An increase in collection efforts typically leads to a decrease in sales volume as stricter credit policies may deter some customers. It also decreases the investment in accounts receivable as collections are more efficient. Bad debt expenses decrease due to better collection, while collection expenditures increase due to the additional efforts.

Table 15.6 A Breakdown of Teffan, Inc.'s Outstanding Accounts Receivable Dated June