If receivables are growing faster than sales, it may be an indication that the company is _________.
A)accomplishing sales growth by taking on increased credit risk
B)accomplishing sales growth by taking steps to reduce credit risk
C)slowing down sales growth by taking on increased credit risk
D)slowing down sales growth by taking steps to reduce credit risk

Question

Quizplus · Accepted Answer

If receivables are growing faster than sales, it means that the company is extending more credit to customers than in the past. This may indicate that the company is attempting to boost sales growth by offering more liberal payment terms or by accepting higher levels of credit risk.

If Receivables Are Growing Faster Than Sales, It May Be