Which of the Following Actions Is Taken to Reduce the Collections

question 66

Multiple Choice

Which of the following actions is taken to reduce the collections period for receivables of a firm?

• A) Increasing the sales of the firm
• B) Decreasing the purchases of the firm
• C) Modifying the credit policy of the firm
• D) Changing the inventory valuation method of the firm
• E) Revising the working capital policy of the firm

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Definitions:

Debits

Accounting entries that increase asset or expense accounts, or decrease liability, equity, or revenue accounts.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure a company's bookkeeping system is mathematically correct.

Journalizing

The process of recording financial transactions in a journal or diary, marking the first step in the accounting cycle.

General Journal

A general journal is a fundamental accounting record where all day-to-day financial transactions of a business are initially recorded.