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:

Tax Cut

A reduction in the amount of taxes that individuals or companies are required to pay to the government.

Taxes

Required financial obligations or other sorts of charges enforced on a taxpayer by a government agency for the purpose of funding governmental activities and several public spending.

Interest Rates

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender, indicative of the cost of borrowing.

Aggregate Demand

The overall demand for all the goods and services in an economy, reflecting the economic activity and consumer spending power.