Which One of the Following Statements Is Correct Concerning the Length

question 25

Multiple Choice

Which one of the following statements is correct concerning the length of the credit period?

• A) Credit periods are relatively constant across industries.
• B) A seller's credit period is not affected by the buyer's inventory cycle.
• C) The buyer's operating cycle affects the length of a seller's credit period.
• D) A seller's credit period should be longer than the buyer's operating cycle.
• E) A seller's credit period should approximate the length of the buyer's receivables period.

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Definitions:

Purchasing Price

The amount of money required to buy a certain quantity of goods or services at a given time.

Incentive

A factor, monetary or otherwise, that motivates individuals or entities to act in a certain way.

Price Index

A statistical measure that tracks changes in the price level of a basket of consumer goods and services over a period of time.

Healthcare Services

The wide range of services provided by medical professionals, hospitals, and clinics, aimed at maintaining or improving people's health.