During 2012, the Accounts Receivable Turnover Ratio for Upward Company

question 76

Multiple Choice

During 2012, the accounts receivable turnover ratio for Upward Company increased from 10 to 15 times per year. Which one of the following statements is the most likely explanation for the change?

• A) The company's credit department has followed up with customers whose account balances are past due in order to generate quicker collections.
• B) The company has decreased sales to its most credit worthy customers.
• C) The company has increased the amount of time customers have to pay their accounts before they are past due.
• D) The company has extended credit to more risky customers in order to increase the accounts receivable turnover ratio.

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Definitions:

Macro Virus

A type of malware that is embedded in a document and can execute malicious sequences of commands upon opening the file.

Trojan Horse

A computer program that appears to be something useful or desirable (such as a game or a screen saver), but at the same time does something malicious in the background without the user’s knowledge.

Computer Virus

Malicious software designed to replicate itself and spread to other computers, often causing damage or stealing information.

Logic Bomb

A computer virus that runs when a certain set of conditions is met, such as when a program is launched a specific number of times.