Accounts receivable turnover will normally decrease as a result of:
A) the write-off of an uncollectible account against the allowance for bad debts.
B) a significant sales volume decrease near the end of the accounting period.
C) an increase in cash sales in proportion to credit sales.
D) a change in credit policy to lengthen the period for cash discounts.

Question

Quizplus · Accepted Answer

A change in credit policy to lengthen the period for cash discounts would likely result in customers taking longer to pay, thus increasing the average accounts receivable balance and decreasing the accounts receivable turnover ratio.

Accounts Receivable Turnover Will Normally Decrease as a Result Of