A decrease in collection efforts will result in_________ in sales volume, _________in the investment in accounts receivable,_________ in bad debt expenses, and_________ in collection expenditures.
A) an increase; a decrease; an increase; a decrease
B) an increase; a decrease; an increase; an increase
C) an increase; an increase; an increase; a decrease
D) a decrease; a decrease; a decrease; an increase

Question

Quizplus · Accepted Answer

A decrease in collection efforts typically leads to more lenient credit terms, which can increase sales volume. However, it also results in higher accounts receivable as more customers delay payments, increased bad debt expenses due to higher risk of non-payment, and decreased collection expenditures due to reduced collection activities.

A Decrease in Collection Efforts Will Result In_________ in Sales