Aging Accounts Receivable​

question 56

Multiple Choice

Aging accounts receivable​

• A) ​shows which accounts are slow payers
• B) ​requires a more lenient credit policy
• C) ​increases the firm's cash
• D) ​decreases the firm's inventory

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Definitions:

Deferral Method

An accounting method where revenue or expenses are recognized after cash is exchanged, delaying the recognition of income or expenses until a future accounting period.

Government Grants

Funds provided by the government to organizations, businesses, or individuals for specific purposes, without any repayment obligation, often to support projects or innovations.

Private Donations

Contributions made by individuals or private entities to nonprofit organizations without expecting anything in return.

Translation Gains

Profits resulting from converting the financial statements of a foreign subsidiary into the parent company's reporting currency, reflecting changes in exchange rates.