If a Firm's Payment Terms for Sales Made on Account

question 25

Multiple Choice

If a firm's payment terms for sales made on account to its customers were 2/10, n30, the number of days' sales in accounts receivable would be expected to be:

• A)less than 10.
• B)between 10 and 25.
• C)between 25 and 40.
• D)over 40.

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Definitions:

Direct Labor-Hours

A unit of measure representing the actual hours worked by employees directly involved in the production process.

Depreciation

A structured approach to spreading out the cost of a solid asset over the period it is expected to be useful.

Variances

Differences between expected and actual performance in areas like budget, costs, and schedule in financial and project management.

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not change regardless of the level of production, such as salaries of supervisors and rent for the factory.