Which of the following actions will tend to decrease the trade receivables period?
I.loosening the standards for granting credit to customers.
II.increasing the discount for early payment by credit customers.
III.increasing the finance charges applied to all customer balances outstanding over thirty days.
IV.granting discounts for cash sales.

Question

Quizplus · Accepted Answer

Increasing the discount for early payment (II) and increasing finance charges for overdue balances (III) encourage quicker payment, reducing the trade receivables period. Granting discounts for cash sales (IV) also reduces receivables by encouraging immediate payment.

Which of the Following Actions Will Tend to Decrease the Trade