During 2016, the Accounts Receivable Turnover Rate for Cordner Company

question 76

Multiple Choice

During 2016, 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:

Unilateral Mistake

An error made by one party in a contract that does not affect the other party's understanding or agreement.

Misunderstanding

A situation where the intended meaning of a communication is not correctly perceived by one or more parties.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly with the intent to deceive, leading to a contract or transaction.

Misrepresentation

Misrepresentation refers to a false statement of fact made by one party to another, which induces that other party into entering a contract.