Which One of the Following Statements Is Correct

question 214

Multiple Choice

Which one of the following statements is correct?

• A) An aging schedule helps identify which customers are the most delinquent.
• B) The percentage of total receivables that fall within a certain time period on an aging schedule will remain constant over time even if the firm has seasonal sales.
• C) Normally firms call their delinquent customers prior to sending them a past due letter.
• D) A constant average collection period over a period of time is cause for concern.
• E) It is common practice when a customer files bankruptcy to sell that customer's receivable at face value.

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Definitions:

Loan Money

The act of giving money, property, or other material goods to another party in exchange for future repayment of the principal amount, along with interest or other finance charges.

Lottery

A form of gambling involving the drawing of numbers for a prize.

Winnings

Refers to the money or prizes earned from gambling, contests, or competitions.

Corporate Bond

A debt security issued by a corporation to raise funding. It obligates the issuer to pay interest and repay the principal at a later date.