B. An unusually large receivable was written off near the end of the year.
C. The aging of accounts receivable was improperly performed in both years.
D. There was an improper cutoff of sales at the end of the year.
D is corrent because an improper cutoff of sales at the end of the year that overstates year-end sales and receivables will decrease the ratio since that ratio is ordinarily far greater than 1. That is, increasing the numerator and denominator of a ratio that is greater than one by the same amount will decrease the ratio (e.g., 3/2 = 1.5 ? 4/3 = 1.3).
A is incorrect because any decrease in sales due to obsolete inventory should be expected to affect both credit sales and receivables in the same proportion.
B is incorrect because that write-off of the receivable will increase the ratio through decreasing its denominator.
C is incorrect because the aging of receivables does not affect the ratio.
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