Which one of the following actions will tend to increase the accounts receivable period? Assume the accounts receivable period is currently 34 days.
A)tightening the standards for granting credit to customers
B)refusing to grant additional credit to any customer who pays late
C)increasing the finance charges applied to all customer balances outstanding over thirty days
D)granting discounts for cash sales
E)eliminating the discount for early payment by credit customers

Question

Quizplus · Accepted Answer

By eliminating the discount for early payment by credit customers, customers are no longer incentivized to pay early and may take longer to pay their balances, therefore increasing the accounts receivable period.

Which One of the Following Actions Will Tend to Increase