7.An analyst notes that ABC Inc.'s allowance for credit losses as a percentage of year-end accounts receivable has changed. Which of the following would not be a plausible explanation for the change?

Multiple Choice

• ABC's management expects a default rate on outstanding receivables different than prior years.
• ABC's management is using the allowance for credit losses to "manage" earnings.
• The company ages its receivables and the distribution of accounts receivable over the various age categories is different than prior years.
• The company has stopped making sales on credit.