A General Rule to Use in Assessing the Average Collection

question 127

Multiple Choice

A general rule to use in assessing the average collection period is that it

• A)should not exceed 30 days.
• B)can be any length as long as the customer eventually pays his account.
• C)should not greatly exceed the discount period.
• D)should not greatly exceed the credit period.

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Definitions:

Check Register

A record, often part of a checkbook, where all check transactions, withdrawals, and deposits are recorded by an account holder.

Interest

A fee, usually charged for the use of money.

Check Register

A record of checks written, deposits made, and current balances within a checking account.

Deposits

Money placed into an account or given to a third party as a pledge for the fulfilment of an agreement.