If a Company Is Overly Optimistic About Debt Collection, the Company

question 44

Multiple Choice

If a company is overly optimistic about debt collection, the company will understate bad debt expense and:

• A) overstate net income; and days to collect will fall.
• B) overstate net income; but days to collect will rise.
• C) understate net income; and days to collect will rise.
• D) understate net income; and days to collect will fall.

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Definitions:

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