Allen Company's average collection period for accounts receivable was 40 days last year, but increased to 60 days this year. Which of the following would most likely account for this change?

a.A decrease in accounts receivable relative to sales

b.A decrease in sales

c.A relaxation of credit policies

d.An increase in sales

If accounts receivable stays the same, and credit sales go up:

a.The average collection period will go up

b.The average collection period will go down

c.Accounts receivable turnover will decrease

d.b. and c.

A decreasing average collection period could be associated with (select the one best answer)

a.Increasing sales

b.Decreasing sales

c.Decreasing account receivables

d.a. and c.