An Increase in Which One of the Following Is Most

question 381

Multiple Choice

An increase in which one of the following is most apt to be an indicator of an accounts receivable policy that is too restrictive?

• A) Bad debts.
• B) Accounts receivable turnover rate.
• C) Accounts receivable period.
• D) Credit sales.
• E) Operating cycle.

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Definitions:

Activity-Based Costing

A method in accounting that assigns costs to products and services based on the resources they consume.

Direct Materials Cost

The expense incurred for materials that are an integral part of a finished product, which can be directly attributed to the product itself.

Activity-Based Costing

A costing methodology that assigns costs to products or services based on the resources they consume, aiming to provide more accurate cost information.

Overhead Cost

Expenses related to the operation of a business that are not directly tied to a specific product or service, such as rent and utilities.