The Days to Collect Receivables Increases from 32 to 48

question 7

Multiple Choice

The days to collect receivables increases from 32 to 48.Which of the following statements is true?

• A)The company is likely to see its bad debt expense decrease.
• B)The receivables turnover rate increases by 50%.
• C)The company is becoming more efficient at collecting payment.
• D)The receivables turnover rate falls from approximately 11.4 to 7.6.

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Definitions:

Component Reliability

Component reliability refers to the likelihood that an individual part or element of a larger system will perform its required functions under stated conditions for a specified period.

Preventive Maintenance

Maintenance activities performed regularly on equipment before faults occur, aimed at reducing the risk of unexpected breakdowns and downtime.

Breakdown Maintenance

The practice of repairing or fixing equipment and machinery only after it has failed or broken down, as opposed to performing regular preventative maintenance.

MTBF Distribution

MTBF (Mean Time Between Failures) Distribution is a statistical representation of the expected performance or reliability of a system, indicating the average time between failures.