Which of the Following Statements Best Describes DSO

question 16

Multiple Choice

Which of the following statements best describes DSO?

• A) Other things held constant, the higher a firm's 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 its aging schedule would probably show some past due accounts.

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Definitions:

Strategic Global Partnerships

Collaborations between companies across different countries aimed at leveraging resources, knowledge, and markets to achieve mutual business goals.

North American Free Trade Agreement

A trilateral trade bloc agreement between Canada, Mexico, and the United States to reduce trading costs, increase business investment, and help North America be more competitive in the global marketplace.

Free Trade

An economic policy that allows imports and exports between countries with minimal or no tariffs, quotas, or prohibitions.

United States

A country located in North America, bordered by Canada to the north, Mexico to the south, the Atlantic Ocean to the east, and the Pacific Ocean to the west.