Last Year,Allen Company's Average Collectionperiod for Accounts Receivable Was 40

question 6

Multiple Choice

Last year,Allen Company's average collectionperiod for accounts receivable was 40 days; this year,it increased to 60 days.Which of the following would most likely account for this change?

• A) A decrease in accounts receivable relative to sales.
• B) A decrease in sales.
• C) A relaxation of credit policies.
• D) An increase in sales.

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Definitions:

Aggregate Supply Curve

A graphical representation that shows the relationship between the overall price level in an economy and the total output of goods and services produced by that economy, assuming constants elsewhere.

Downward Shift

In economics, refers to a decline in the position of a demand or supply curve on a graph, indicating a decrease in quantity demanded or supplied at any given price.

Keynes

An economist who advocated for government intervention in markets to mitigate the adverse effects of economic recessions and depressions through fiscal and monetary policies.

Government Spending

Expenditures made by the public sector on goods and services such as healthcare, education, and defense, which can impact the country's economy.