A General Rule to Use in Assessing the Average Collection

question 187

Multiple Choice

A general rule to use in assessing the average collection period is that

• A) it should not exceed 30 days.
• B) it can be any length as long as the customer continues to buy merchandise.
• C) it should not greatly exceed the discount period.
• D) it should not greatly exceed the credit term period.

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Definitions:

Income Distribution

The way in which a nation’s total earnings are spread among its population, which can influence social and economic stability.

Country

A distinct territorial body or political entity recognized as an independent nation.

Tax-transfer Programs

Government initiatives that collect revenue through taxes to fund transfers of money to individuals or groups, often aimed at reducing poverty and inequality.

Agriculture Subsidies

Financial assistance provided by the government to farmers and agribusinesses to supplement their income and manage the supply of agricultural commodities.