If the Average Trade Receivables That a fiRm Holds Decreases

question 115

Multiple Choice

If the average trade receivables that a firm holds decreases without any decrease in credit sales, the operating cycle will:

• A)stay the same because of no sales change.
• B)stay the same because cash collections are sooner, and it will affect the cash cycle only.
• C)decreases because days sales outstanding decreases.
• D)stay the same because trade receivables are not in the operating cycle.
• E)have an unknown effect.

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Definitions:

Cognitive Dissonance

A psychological conflict resulting from incongruous beliefs and attitudes held simultaneously.

Psychologically Inconsistent

Exhibiting behaviors or thoughts that are not in harmony with one's usual psychological patterns.

Deindividuation

A psychological state where an individual loses self-awareness and self-restraint, often occurring in group settings that foster anonymity.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or societal standards.