Which One of the Following Explanations for the Growth of Accounts

question 31

Multiple Choice

Which one of the following explanations for the growth of accounts receivable outstripping the growth of sales presents a red flag?

• A)The firm adopts new credit terms that lengthen the payment terms to the industry average.
• B)The firm adopts an aggressive revenue recognition policy.
• C)The firm develops an attractive credit policy for first time buyers.
• D)The firm changes its timing of revenue recognition to a more conservative approach.