A Firm's Collection Policy, I

question 127

True/False

A firm's collection policy, i.e., the procedures it follows to collect accounts receivable, plays an important role in keeping its average collection period short, although too strict a collection policy can reduce profits due to lost sales.

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Definitions:

Establishing Standards

The act of defining benchmarks or criteria against which processes, products, or activities can be measured or judged.

Top Performers

Individuals in an organization who consistently exceed performance expectations and standards.

Day-to-Day Decisions

Refers to the routine choices and judgments made by individuals or organizations that affect immediate or short-term operations.

Performance Feedback

A process where supervisors or managers provide employees with information regarding their work performance, including strengths, weaknesses, and areas for improvement.