What Is a Danger Resulting from Excessively High Levels of Accounts

question 11

Multiple Choice

What is a danger resulting from excessively high levels of accounts receivable in a food service operation?

• A) The operation's sales will be over-reported
• B) The operation's sales will be under-reported
• C) The operation may experience operating cash overages
• D) The operation may experience operating cash shortages

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Definitions:

Corporations Act

A major legislation regulating corporate entities in some jurisdictions, detailing rules on incorporation, management, shareholders, and financial reporting.

Operating Cycles

The period of time it takes for a company to purchase inventory, sell it, and convert the sale into cash.

Property Development

The process of planning, investing in, and building projects on real estate property, including commercial, residential, and industrial projects.

Manufacturing

The process of converting raw materials, components, or parts into finished goods that meet a customer's expectations or specifications.