[amp_mcq option1=”reducing the average collection period” option2=”increasing the average collection period” option3=”increasing sales” option4=”decreasing sales” correct=”option1″]<\/p>\n
The correct answer is: A. reducing the average collection period.<\/p>\n
Offering cash discounts to customers can encourage them to pay their bills more quickly, which can reduce the average collection period. This is because customers who are offered a discount for paying early are more likely to do so in order to save money.<\/p>\n
The average collection period is the average number of days it takes a company to collect its receivables. A shorter average collection period is generally considered to be a good thing, as it means that the company is able to collect its money more quickly and use it to finance its operations.<\/p>\n
There are a number of other factors that can affect the average collection period, such as the industry in which the company operates, the terms of trade that the company offers its customers, and the company’s credit policy.<\/p>\n
However, offering cash discounts is one way that a company can try to reduce its average collection period.<\/p>\n","protected":false},"excerpt":{"rendered":"
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