Which of the Following Actions Are Likely to Reduce the Length

question 110

Multiple Choice

Which of the following actions are likely to reduce the length of a company's cash conversion cycle?

• A) Adopting a new inventory system that reduces the inventory conversion period.
• B) Reducing the average days sales outstanding (DSO) on its accounts receivable.
• C) Reducing the amount of time the company takes to pay its suppliers.
• D) Statements a and b are correct.
• E) All of the statements above are correct.

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Definitions:

Tax Bracket

Categories at varying tax rates applied to ranges of income; the higher the income, the higher the percentage of tax levied.

Progressive

Pertains to political and social movements that aim for reforms and advancements by advocating for changes in economic, social, and political structures.

Taxable Income

The portion of an individual's or a company's income used to determine how much tax they owe to the government in a given tax year.

Average Tax Rate

The portion of total income that is paid as tax, calculated by dividing the total amount of taxes paid by the taxpayer's total income.