If a Company Is Overly Optimistic About Debt Collection,the Company

question 76

Multiple Choice

If a company is overly optimistic about debt collection,the company will understate bad debt expense and:

• A)overstate net income; and days to collect will fall.
• B)overstate net income; and days to collect will rise.
• C)understate net income; and days to collect will rise.
• D)understate net income; and days to collect will fall.

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Definitions:

Average Precipitation

The mean amount of rain, snow, sleet, or hail that falls in a region over a set period, usually measured in millimeters or inches.

Average Temperature

The mean value of temperature taken over a specified period of time which indicates the overall climate pattern of a region.

Leeward Side

The side of a mountain or hill sheltered from the wind; typically receives less precipitation.