Table 15.6 A Breakdown of Teffan, Inc.'s Outstanding Accounts Receivable Dated June

question 19

Multiple Choice

Table 15.6
A breakdown of Teffan, Inc.'s outstanding accounts receivable dated June 30, 2014 on the basis of the month in which the credit sale was initially made follows. The firm extends 30-day credit terms.
-An increase in collection efforts by a firm will result in ________ in sales volume, ________ in the investment in accounts receivable, ________ in bad debt expenses, and ________ in collection expenditures.

• A) an increase; a decrease; an increase; a decrease
• B) an increase; a decrease; a decrease; an increase
• C) an increase; a decrease; an increase; an increase
• D) a decrease; a decrease; a decrease; an increase

---

Definitions:

Owner's Drawings

Withdrawals of a company's earnings by the owner for personal use, affecting the owner’s equity account in a separately held business.

Accumulated Depreciation

This accounts for the total depreciation expenses charged against a fixed asset since it was put into use, reflecting the decrease in value of the asset.

Income Summary

An account used in the closing process that summarizes revenues and expenses for a period, determining the net income or loss.

Owner's Drawings

Withdrawals made by the owner of a business from the company's funds for personal use.