Question

What is the most likely reason for a company to have an increase in average collection period? a. The company has incurred additional marketing expenses to attract customers.b. The company has become more lenient in its credit policies and is extending credit terms to maintain customers.c. Customers are paying in a timelier manner.d. The company has tightened its credit policies for its customers.

Answer 1

Option A

the most likely reason for a company to have an increase in average collection period : The company has incurred additional marketing expenses to attract customers

Explanation:

The average collection period is the measure of time it necessitates for a business to obtain prices owed by its customers in words of accounts receivable.  To satisfy their economic commitments, Businesses estimate the average collection period to create assured they possess sufficient money on control.

Most firms intend for an average collection period that is flatter than a retail credit system. They require to be capable to extend serving terms to intrigue customers and be capable to accumulate efficiently as strongly.