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Which policies are written with the objective of accelerating cash receipts and maximizing ultimate collectability of...

Which policies are written with the objective of accelerating cash receipts and maximizing ultimate collectability of the accounts receivable? A. Billing, credit, and collection policies B. Coding and compliance policies C. Disbursement policies D. Revenue auditing policies

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Answer #1

Answer: A Billing , Credit and collection policies.

In order to increase the cash receipts, the credit policy should be alter inorder to give lesser credits and to increase cash sales and decrease credit sales, similarly in order to increase the collection, the collection policy should be made strong giving lesser credit period thereby reducing the average collection period. This avoids the cost incurred due to bad debts and shall increase the probability of ultimate collection.

Options B, C and D are incorrect since they deal with the audit which occurs once the sale has been made, and with the disbursment policy which is irrelavant to the compay making sales since collection policy what is relevant.

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