A Very Low Accounts Receivable Turnover Would Most Likely Indicate

question 20

Multiple Choice

A very low accounts receivable turnover would most likely indicate that:

• A)net credit sales for the year have been understated.
• B)policies for extending credit to customers are too tight.
• C)the company is unsuccessful in its efforts to collect cash from customers.
• D)accounts receivable balances have been overstated.

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Definitions:

Utility Maximization

A principle in economics where individuals or firms aim to achieve the highest satisfaction or profit from their resources and decisions.

Budget Constraints

The limitations on the spending behavior of consumers, based on their income and the prices of goods and services.

Consumer Equilibrium

A state where the allocation of resources by consumers results in the maximization of their utility, with no incentive to change their consumption pattern.

Utility

In economics, it refers to the satisfaction or benefit derived by consumers from consuming goods and services.