Which of the Following Statements Is Incorrect

Multiple Choice

Which of the following statements is incorrect?

A) An accounts receivable arises when a business sells goods or services to a third party on credit terms.
B) The absence of bad debts is an indicator that the credit policy may be too strict and can result in the loss of profits.
C) The higher the number of customer being supplied on credit and amount of inventories, the lower the working capital requirements.
D) The failure to allow for uncollectable accounts will cause the owners' equity to be overstated.