During the year, Moscovitz Produce’s receivable collection period decreased from

Question

During the year, Moscovitz Produce’s receivable collection period decreased from 35.6 to 31.4 days. The company makes sales only on credit. All customers are allowed credit terms of 1/10, n/30. Which statement is true?

A. The company is not doing as well in collecting amounts due from customers.

B.   The company is earning less profit on its sales than it has in the past.

C.   The company is doing a better job in collecting amounts owed by customers.

D.   The company is writing off more uncollectible accounts than it did in the past.

Explanation / Answer

C.   The company is doing a better job in collecting amounts owed by customers.

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