A Company with Sales Terms of N/30 Would Prefer a Receivable

question 39

Multiple Choice

A company with sales terms of n/30 would prefer a receivable turnover of:

• A)5)
• B)20.
• C)10.
• D)2)
• E)All of these choices are equally desirable if sales terms are n/30.

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Definitions:

Flexible Budget

A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.

Revenue Variance

The difference between the actual revenue earned by a business and its expected (or budgeted) revenue, which can be favorable or unfavorable.

Sales Revenue

The income received by a company from its sales of goods or the provision of services before any expenses are deducted.

Actual Level

The real, observed state or value of a variable or metric at a given point in time, opposed to theoretical or planned levels.