An Increase in the Accounts Receivable Turnover May Be Due

question 43

True/False

An increase in the accounts receivable turnover may be due to an improvement in the collection of receivables or to a change in the granting of credit and/or in collection practices.

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Definitions:

Retained Earnings

The portion of net income that is kept by the company rather than distributed to its shareholders as dividends.

Contributed Surplus

The value of anything of value that is given to a company in exchange for shares, above the par value of the shares.

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue.

Retained Earnings

Retained earnings are the accumulated net profits that a company chooses to keep rather than distribute to shareholders as dividends, often reinvested in the business.