Which One of the Following Is not a Principle of Sound

question 53

Multiple Choice

Which one of the following is not a principle of sound accounts receivable management?

• A)Determine to whom to extend credit.
• B)Delay cash receipts from receivables if necessary.
• C)Monitor collections.
• D)Determine a payment period.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, often used to assess the efficiency of inventory management.

Accounts Receivable Turnover

A measure of how efficiently a company collects its outstanding credit sales, calculated as sales divided by average accounts receivable.

Accounts Payable Period

The amount of time it takes for a business to pay its suppliers after receiving goods or services, reflecting the company's payment policy towards its creditors.

Accounts Receivable

Sum owed by clients to a company for goods or services that have been dispatched or provided, with payment still due.