Which is true regarding the collectability of accounts receivable?

A) A company should establish a credit policy after they have an issue with a customer not paying.
B) An accounts receivable aging report is not always helpful when monitoring receivables and collectability.
C) Newer accounts receivable balances should be monitored more since it is less likely the customer will pay.
D) Generally,the older the account,the less likely the customer will pay the bill.

Generally, the longer an account receivable goes unpaid, the less likely it is that the customer will pay. Therefore, it's important to monitor aging reports regularly to ensure timely collection of payments. Choice A is incorrect because a company should establish a credit policy before extending credit to customers to avoid potential issues with unpaid bills. Choice B is incorrect because an aging report is a useful tool for tracking the collectability of accounts receivable, allowing companies to identify problem areas and take corrective action. Choice C is incorrect because newer accounts receivable balances are generally considered low-risk and are less likely to become delinquent since the customer relationship and payment history is still developing.