What Is a Possible Reason for Accounts Receivable Turnover to Increase

question 164

Multiple Choice

What is a possible reason for accounts receivable turnover to increase from one year to the next year

• A) Decreased credit sales during a recession.
• B) Write-off uncollectible receivables.
• C) Granting credit to customers with lower credit quality.
• D) Improved collection process.

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Definitions:

FOB Destination

A shipping term indicating that the seller is responsible for the goods and transportation costs until the buyer receives the goods.

FOB Shipping Point

A shipping term indicating that the buyer assumes the risk and transportation costs for goods once they have left the seller's premises.

Merchandise Inventory

Finished goods available for sale to customers in a retail or wholesale business.

Periodic Inventory System

An inventory accounting system where inventory levels are updated and cost of goods sold is calculated at the end of an accounting period.