Which of the Following Is Not Correct

Multiple Choice

Which of the following is not correct?

A) Collection policy is how a firm goes about collecting past-due accounts.
B) A more aggressive collection policy will reduce bad debt expenses, but may also decrease sales.
C) Collection policy usually has little impact on sales since collecting past-due accounts occurs only after the customer has already purchased.
D) Typically a firm will turn over an account to a collection agency only after it has tried several times on its own to collect the account.
E) A lax collection policy will frequently lead to an increase in accounts receivable.