AFP Certified Treasury Professional CTP Question # 433 Topic 21 Discussion

AFP Certified Treasury Professional CTP Question # 433 Topic 21 Discussion

CTP Exam Topic 21 Question 433 Discussion:
Question #: 433
Topic #: 21

A company using open account terms with buyers has experienced the following in its last fiscal year:

* Gross sales increased from $10,000,000 to $11,000,000

* Net revenue decreased from $5,000,000 to $4,000,000

* DSO increased from 45 days to 60 days

What has the company MOST LIKELY discovered?


A.

The cash conversion cycle is lower.


B.

Account delinquencies have increased.


C.

Interest rates on bad debt have increased.


D.

Days' inventory has decreased.


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