If the Company Changes Its Credit Granting Policies and Begins

Multiple Choice

If the company changes its credit granting policies and begins granting credit to less creditworthy customers, which of the following statements is true regarding the likely effect on the receivables turnover ratio and the days to collect measure?

A) The receivables turnover ratio will decrease and days to collect will increase.
B) The receivables turnover ratio will increase and days to collect will increase.
C) The receivables turnover ratio will decrease and days to collect will decrease.
D) The receivables turnover ratio will not change and days to collect will decrease.