Which of the Following Is Not Correct

question 9

Multiple Choice

Which of the following is not correct?

• A) Collection policy is how a firm goes about collecting past-due accounts.
• B) A more aggressive collection policy will reduce bad debt expenses, but may also decrease sales.
• C) Collection policy usually has little impact on sales since collecting past-due accounts occurs only after the customer has already purchased.
• D) Typically a firm will turn over an account to a collection agency only after it has tried several times on its own to collect the account.
• E) A lax collection policy will frequently lead to an increase in accounts receivable.

---

Definitions:

Transactions

Financial activities or dealings between parties, such as buying, selling, or the exchange of assets, that affect the financial statements of a business.

B2C

Business-to-Consumer, a sales model where businesses sell products or services directly to individual consumers.

B2B

An abbreviation for "business-to-business," describing commerce transactions between businesses, such as between a manufacturer and a wholesaler.

E-commerce

The buying and selling of goods and services over the internet.