Question

Which of the following is least likely to be a reasonable explanation for an increase in accounts receivable turnover? A. Early payment incentives for customers. B. Tightening of credit policy. C. Implementation of more aggressive collection policies. D. Allowance of a new grace period for customer payments.

Answer 1

Answer:

(D) Allowance of a new grace period for customer payments.

Explanation:

Accounts Receivable Turnover.

Accounts receivable turnover refers to the number of times in a year that a company receives its average account receivable. It shows how quickly a customer should pay the company for credit sales.

This also shows the company's effectiveness in issuing out sales on credit and collecting funds from the customers at the right time.