Which Is True Regarding the Collectability of Accounts Receivable

question 2

Multiple Choice

Which is true regarding the collectability of accounts receivable?

• A)A company should establish a credit policy after they have an issue with a customer not paying.
• B)An accounts receivable aging report is not always helpful when monitoring receivables and collectability.
• C)Newer accounts receivable balances should be monitored more since it is less likely the customer will pay.
• D)Generally,the older the account,the less likely the customer will pay the bill.

---

Definitions:

Excess Reserves

The amount of reserves that a bank holds beyond the minimum required by regulation or central bank policy.

Decrease Deposits

A reduction in the amount of funds deposited in banks or financial institutions, often indicating a shift in savings or investment strategies.

Excess Reserves

The reserves that banks hold over and above the legal requirement set by the central bank, available to lend or invest.

Income-producing Assets

Assets that generate revenue over time, such as rental properties, stocks, or bonds.