During 2014, the Accounts Receivable Turnover Rate for Cordner Company

question 111

Multiple Choice

During 2014, the accounts receivable turnover rate for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

• A)The company's credit department has followed up with customers whose account balances are past due in order to generate quicker collections.
• B)The company has decreased sales to its most credit worthy customers.
• C)The company has increased the amount of time customers have to pay their accounts before they are past due.
• D)The company has extended credit to more risky customers in order to increase sales.

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Definitions:

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specific period.

Legally Exchanged

Refers to the process of trading goods, services, or financial instruments in accordance with laws and regulations.

Quota Rent

The earnings that accrue to license holders in a system where import quantity is limited by quotas; it represents the difference between domestic prices and world prices due to restricted supply.

Government Imposes

The act of the government enacting regulations, taxes, restrictions, or laws that directly affect business practices, individual behavior, or market operations.