Which of the Following Ratios, When Small, May Indicate an Inadequate

question 91

Multiple Choice

Which of the following ratios, when small, may indicate an inadequate estimation process?

• A)Uncollectible accounts expense to accounts receivable write-offs
• B)Uncollectible accounts expense to net credit sales
• C)Accounts receivable growth to sales growth
• D)Accounts receivable turnover in days

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Definitions:

Price Decrease

A reduction in the cost at which goods or services are sold in the market.

Demand

The capacity for purchasing goods or services that people demonstrate readiness and financial ability for, at diverse price levels, during a certain timeframe.

Law Of Demand

The economic principle stating that as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa.

Income Increases

A situation wherein individuals or entities experience a rise in their earnings or profits over a certain period.