To Ensure the Validity of a Lease Agreement, It Should

question 11

True/False

To ensure the validity of a lease agreement, it should be for a term that does not exceed one year.

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Definitions:

Average Collection Period

The average number of days it takes for a company to receive payments owed by its customers for sales on credit.

Credit Policies

Guidelines that a company follows to determine the creditworthiness of customers, terms of credit, collection procedures, and how much credit to extend.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used, but not yet paid for.

Cash-flow Management

The process of monitoring, analyzing, and optimizing the net amount of cash receipts minus cash expenses.