What Is the Most Likely Reason for a Company to Have

question 28

Multiple Choice

What is the most likely reason for a company to have an increase in average collection period?

• A)The company has incurred additional marketing expenses to attract customers.
• B)Customers are paying in a timelier manner.
• C)The company has tightened its credit policies for its customers.
• D)The company has become more lenient in its credit policies and is extending credit terms to maintain customers.

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Definitions:

Foreclose

The legal process by which a lender takes control of a property from a borrower due to failure to meet the repayment terms of a loan.

Defaulted

Defaulted refers to the failure to fulfill an obligation, especially the failure to repay a loan on time or to meet a contractual condition, leading to possible legal penalties or loss of rights.

Equity of Redemption

The right of a mortgagor to reclaim property on which a mortgage exists by repaying the debt before a foreclosure sale.

Legal Title

The legal entitlement to possess property, safeguarded and upheld by the legal system.