Which of the following actions will tend to decrease the accounts receivable 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 payments, thus decreasing the accounts receivable period. Granting discounts for cash sales (IV) also reduces the accounts receivable period as it encourages immediate payment.

Which of the Following Actions Will Tend to Decrease the Accounts