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:

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to any change in market conditions.

Manufacturer

An entity engaged in the conversion of raw materials or components into finished goods for sale.

Total Product Curve

A graphical representation showing how the total quantity of output of a good or service varies with the amount of a variable input used in production.

Variable Input

Variable Input refers to any input in the production process that varies with the level of output, such as labor, raw materials, and energy, in contrast to fixed inputs which remain constant regardless of the level of production.