Allen Company's Average Collection Period for Accounts Receivable Was 40

question 156

Multiple Choice

Allen Company's average collection period for accounts receivable was 40 days last year, but increased to 60 days this year. 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:

Fractions

Mathematical expressions representing the division of one quantity by another, indicating a part of a whole.