Lancer Wholesale Company wants to improve cash flow provided by accounts receivable collections.Which of the following strategies would be most likely to help Lancer achieve this objective?
A)Offering cash discounts to buyers who pay their accounts promptly.
B)Offering extended payment plans to qualified buyers.
C)Accepting IOUs from customers who buy in large quantities.
D)Relaxing its credit policy for new customers.

Question

Quizplus · Accepted Answer

Offering cash discounts to buyers who pay their accounts promptly will incentivize customers to pay their bills on time, therefore improving cash flow provided by accounts receivable collections. Offering extended payment plans would delay collections, accepting IOUs may not result in actual payment, and relaxing credit policies could lead to increased risk of default.

Lancer Wholesale Company Wants to Improve Cash Flow Provided by Accounts