If a company is overly optimistic about debt collection, the company will understate bad debt expense and:

overstate net income but days to collect will increase.

Explanation:

A bad debt expense is defined when any receivable is no more collectible as the customer is not able to fulfil or satisfy the obligation in order to pay the obligation of paying an outstanding debt because of some financial problems or due to bankruptcy.

Thus when any organization is more optimistic about the debt collection, it will understate the bad debt expenses and will also overstate the net income. But in this case the number of days to collect the payment increases.

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.

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