During 2012, the accounts receivable turnover ratio for Upward Company increased from 10 to 15 times per year. Which one of the following statements is the most likely explanation for the change?

Question

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An increase in accounts receivable turnover ratio indicates that the company is collecting its accounts receivable at a faster rate, which could be attributed to improved credit and collection policies, such as follow-up with customers whose accounts are past due. The other choices would likely result in a decrease in accounts receivable turnover ratio.

During 2012, the Accounts Receivable Turnover Ratio for Upward Company