An increase in accounts receivable turnover due to an increase in collection efforts will
A) decrease the firm's marginal investments in accounts receivable.
B) decrease the firm's collection expense.
C) increase the firm's bad debt expense.
D) increase the firm's marginal investments in accounts receivable.

Question

Quizplus · Accepted Answer

An increase in accounts receivable turnover indicates that the firm is collecting its receivables more quickly, which reduces the amount of money tied up in accounts receivable, thus decreasing the firm's marginal investments in accounts receivable.

An Increase in Accounts Receivable Turnover Due to an Increase