Which of the Following Statements Is CORRECT

question 2

Multiple Choice

Which of the following statements is CORRECT?

• A) If a security analyst saw that a firm's days' sales outstanding (DSO)was higher than the industry average and trending still higher,this would be interpreted as a sign of strength.
• B) A high average DSO indicates that none of the firm's customers are paying on time.In addition,it makes no sense to evaluate the firm's DSO with the firm's credit terms.
• C) There is no relationship between the days' sales outstanding (DSO)and the average collection period (ACP).These ratios measure entirely different things.
• D) A reduction in accounts receivable would have no effect on the current ratio,but it would lead to an increase in the quick ratio.
• E) If a firm increases its sales while holding its accounts receivable constant,then its days' sales outstanding will decline,other things held constant.

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Definitions:

Defamation

The act of making false statements about someone that harm their reputation.

U.S. Constitution

The foundational document of the United States that outlines the framework of the government, its powers, and the rights of the citizens.

Defenses

Legal arguments and strategies employed to contest allegations or charges in a legal case.

Fraudulent Misrepresentation

A false statement of fact made knowingly, or without belief in its truth, or recklessly, causing someone to enter into a contract.