In the Text,the "Red-Line Method" Refers to

question 147

Multiple Choice

In the text,the "red-line method" refers to

• A) The policy of drawing a red line around certain neighborhoods on a map and then refusing to sell on credit to people who live within those areas.
• B) Restrictions imposed by companies which insure credit risks.
• C) The use,in Dun & Bradstreet's reports,of a red line to show the maximum amount of credit which should be extended to a given customer;companies using this limit when they screen customers' orders are said to be using the "red-line method."
• D) A method of controlling inventories by drawing a red line on the inside of a bin.
• E) A method of controlling receivables by drawing a red line on invoices of companies that are expected to pay late.

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Definitions:

Comparative Balance Sheets

Comparative balance sheets display the financial position of a business at different points in time, facilitating the analysis of trends over time.

Year 1

Typically refers to the first year of operation for a business or the initial year in a time series analysis in accounting or finance contexts.

Investing Activities

This refers to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted into cash in the upcoming fiscal year.