Which of the Following Statements Is Most Correct

question 111

Multiple Choice

Which of the following statements is most correct?

• A) If a firm's volume of credit sales declines then its DSO will also decline.
• B) If a firm changes its credit terms from 1/20, net 40 days, to 2/10, net 60 days, the impact on sales can't be determined because the increase in the discount is offset by the longer net terms, which tends to reduce sales.
• C) The DSO of a firm with seasonal sales can vary. While the sales per day figure is usually based on the total annual sales, the accounts receivable balance will be high or low depending on the season.
• D) An aging schedule is used to determine what portion of customers pay cash and what portion buy on credit.
• E) Aging schedules can be constructed from the summary data provided in the firm's financial statements.

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Definitions:

Standard Socket

A tool attachment designed to fit onto a wrench, allowing the wrench to tighten or loosen bolts and nuts of standard sizes.

Screw Pitch Gauge

A toothed template gauge used for measuring screw pitch or threads per inch (tpi).

Threads Per Inch

A measure of the thread density in fasteners, indicating how many threads are present within an inch length of the screw.

Thread Angle

Refers to the angle between the sides of the thread profile on a screw or threaded component, typically measured in degrees.