Why Is It a Good Business Practice to Keep Accounts

question 44

Multiple Choice

Why is it a good business practice to keep accounts receivable as low as possible?

• A) Complies with government regulations
• B) Decreases expensive paperwork
• C) Can use the money to earn interest or pay debts
• D) Provides better service to patients

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible fixed asset over its useful life, reflecting the asset's consumption or wear and tear.

Book Value

The net value of a company's assets minus its liabilities, often used to evaluate the worth of a company.

Constant Percentage

A method or rate that remains unchanged over a specified period or under certain conditions.

Capital Expenditure

Capital allocated by a business to purchase, improve, and sustain tangible assets like real estate, factories, or machinery.