Which One of the Following Will Increase the Average Balance

question 339

Multiple Choice

Which one of the following will increase the average balance in accounts receivable?

• A) A decrease in the discount period.
• B) Cash sales as an increased percentage of total sales.
• C) A decrease in the firm's cheque processing time.
• D) An increase in the sales amount per customer.
• E) A decrease in the trade discount.

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Definitions:

Debtor

An individual or entity that owes money to another called the creditor.

Involuntary Filings

Legal proceedings initiated by creditors against a debtor who fails to pay owed debts, often leading to bankruptcy.

Steady Income

Regular and consistent earnings from employment, investments, or other sources.

Corporations

Legal entities that are separate from their owners, providing limited liability protection, and having the ability to enter into contracts, sue, and be sued.