If a Firm Has $400,000 in Credit Sales and $80,000

question 3

Multiple Choice

If a firm has $400,000 in credit sales and $80,000 in average accounts receivable, what will happen to average days collections if accounts receivable increases?

• A) Average days collections will stay the same.
• B) Average days collections will decrease.
• C) Average days collections will increase.
• D) Cannot tell with the information provided.

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Definitions:

Thematic Apperception Test

A projective psychological test in which respondents reveal their underlying motives, feelings, and traits through the stories they make up about ambiguous pictures.

Validity

The degree to which a test or instrument measures what it is intended to measure.

Rorschach Test

The Rorschach test is a psychological test in which subjects' perceptions of inkblots are recorded and then analyzed using psychological interpretation or complex algorithms.

Projective Tests

Psychological assessments where individuals are shown ambiguous stimuli and their responses are interpreted to uncover underlying thoughts, feelings, or traits.