Which of the Following Statements Is CORRECT

question 49

Multiple Choice

Which of the following statements is CORRECT?

• A) Other things held constant,the higher a firm's days sales outstanding (DSO),the better its credit department.
• B) If a firm that sells on terms of net 30 changes its policy to 2/10,net 30,and if no change in sales volume occurs,then the firm's DSO will probably increase.
• C) If a firm sells on terms of 2/10,net 30,and its DSO is 30 days,then the firm probably has some past due accounts.
• D) If a firm sells on terms of net 60,and if its sales are highly seasonal,with a sharp peak in December,then its DSO as it is typically calculated (with sales per day = Sales for past 12 months/365)would probably be lower in January than in July.
• E) If a firm changed the credit terms offered to its customers from 2/10,net 30 to 2/10,net 60,then its sales should increase,and this should lead to an increase in sales per day,and that should lead to a decrease in the DSO.

---

Definitions:

Controllable Factors

Elements in marketing and business that can be directly managed or influenced by a company, such as product development, pricing, and distribution strategies.

Administrative Forces

Refers to regulatory measures and government laws that affect how businesses operate within a given jurisdiction.

Marketing Mix

The combination of strategies involving product, price, distribution, and promotion that a company employs to effectively market its goods or services.

Communication

The act of transferring information, ideas, or feelings between individuals or groups using spoken words, written text, or other symbols.