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:

Endocrine System

A collection of glands that produce hormones that regulate metabolism, growth and development, tissue function, sexual function, reproduction, sleep, and mood, among other things.

Pituitary Gland

A pea-sized gland just beneath the hypothalamus that controls growth and regulates other glands.

Adrenal Glands

Small, triangular glands located above the kidneys that produce hormones like cortisol and adrenaline, which help control stress responses, metabolism, immune system, and blood pressure.

Genetic Heritage

The genetically inherited characteristics and traits passed down from one's ancestors.