Which of the following reasons should not be considered in order to explain why the receivables appear to be abnormally high?
A)Sales volume expanded materially late in the year.
B)Receivables have collectibility problems and possibly some should have been written off.
C)The company seasonally dates invoices.
D)Material amount of receivables are on the installment basis.
E)Sales volume decreases materially late in the year.

Question

Quizplus · Accepted Answer

Sales volume decreasing materially late in the year would actually result in lower receivables, so it cannot be considered as a reason for abnormally high receivables. A, B, C, and D could all be factors that contribute to the high receivables.

Which of the Following Reasons Should Not Be Considered in Order