Which of the Following Statements Best Describes Accounts Receivable

question 33

Multiple Choice

Which of the following statements best describes accounts receivable?

• A) If a security analyst saw that a firm's DSO was higher than the industry average and was also increasing and trending still higher, this would be interpreted as a sign of strength.
• B) If a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its DSO will increase.
• C) There is no relationship between the DSO and the ACP. These ratios measure entirely different things.
• D) If a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its days' sales outstanding will decline.

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Definitions:

Relics

The body parts, clothing, or objects associated with a holy figure, such as the Buddha or Christ or a Christian saint. Also, in Africa, the bones of ancestors.

Pilgrims

Travelers who journey to a sacred place for religious reasons, often undertaken as a quest or for a votive purpose.

Compound Piers

Vertical architectural elements that are composed of clusters of columns or pilasters, often used to support arches or vaults in large buildings.

Attached Columns

Architectural elements where columns are attached to a wall, partially embedded and purely decorative, not supporting any actual weight.