It Takes Your Staff 1

question 8

Multiple Choice

It takes your staff 1.5 days to prepare and mail out all the monthly customer statements. On average, the mail time between your office and your customers is 3.3 days. Customer checks take an average of 1.2 days to clear the bank. You have determined that your total average collection time is 6.3 days. How long, on average, does it take your staff to process the payments from customers?

• A) 1.8 days
• B) .3 days
• C) .7 days
• D) 1.4 days
• E) 1.1 days

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Definitions:

Accrued Expenses

Expenses incurred but not yet paid in cash or recorded.

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a claim on profits in the form of dividends.

Treasury Stock

A corporation’s own stock that has been issued and subsequently reacquired from shareholders by the corporation but not retired.

Investing Activity

Transactions involving the purchase or sale of long-term assets and investments, reflected in the cash flow statement of a company.