Which One of the Following Actions Will Tend to Increase

question 32

Multiple Choice

Which one of the following actions will tend to increase the accounts receivable period?

• A)Increasing the finance charges applied to all customer balances outstanding over 30 days
• B)Increasing the discount for early payment by credit customers
• C)Granting discounts for cash sales
• D)Loosening the standards for granting credit to customers
• E)Refusing credit to all existing and future customers

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Definitions:

Expense

An outflow of cash or other valuable assets that a business incurs as a result of its operations intended to generate revenue.

Liability

Financial obligations or debts that a company owes, which are settled over time through the transfer of economic benefits including money, goods, or services.

Trial Balance

A report that lists all the balances of the general ledger accounts to check the correctness of bookkeeping entries.

Entry Posted

The action of recording an accounting entry in the ledger, which finalizes the transaction and makes it part of the financial records.