Recently There Have Been Several Mergers Involving Big Four Accounting

question 135

Multiple Choice

Recently there have been several mergers involving Big Four accounting firms. One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young. This is an example of a

• A) joint venture.
• B) horizontal merger.
• C) vertical merger.
• D) syndicate.
• E) conglomerate merger.

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how many times a business can collect its average accounts receivable during a period, indicating how efficiently it manages credit extended to customers.

Average Sale Period

The average time it takes for a company to complete a sales cycle from the initial contact to the final sale.

Average Sale Period

A financial metric that calculates the average time it takes for a company to sell its inventory, indicating the efficiency of sales and inventory management.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers, indicating the efficiency of the company’s credit and collection policies.