It Would Be Common for a fiRm Which Has Adhered

question 329

True/False

It would be common for a firm which has adhered to a cash sales policy to experience a sudden
and significant, but short-term, decrease in cash receipts immediately following the time the firm
converts to a credit policy.

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Definitions:

CCA Class

A category within the Capital Cost Allowance system in Canada for tax depreciation of assets.

Lease

A contractual arrangement whereby a lessor allows a lessee to use an asset in return for periodic payments for a specified period of time.

CCA Class

A category under the Canadian tax system that determines the depreciation rate for tax purposes on capital assets.

Net Advantage

The benefit or gain that results from a specific course of action, minus any associated costs.