Which of the Following Statements Is CORRECT

question 43

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm that sells on terms of net 30 changes its policy to 2/10 net 30, and if no change in sales volume occurs, then the firm's DSO will probably increase.
• B) If a firm sells on terms of 2/10 net 30, and its DSO is 30 days, then the firm probably has some past-due accounts.
• C) If a firm sells on terms of net 60, and if its sales are highly seasonal, with a sharp peak in December, then its DSO as it is typically calculated (with sales per day = Sales for past 12 months/365) would probably be lower in January than in July.
• D) If a firm changed the credit terms offered to its customers from 2/10 net 30 to 2/10 net 60, then its sales should increase, and this should lead to an increase in sales per day, and that should lead to a decrease in the DSO.
• E) Other things held constant, the higher a firm's days sales outstanding (DSO), the better its credit department.

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Definitions:

Quality Control

The processes and procedures put in place to ensure that products or services meet a certain standard of excellence.

Medical Asepsis

Practices aimed at reducing the risk of infection and maintaining a sterile environment in medical settings.

Infection Control

Refers to policies and procedures used to minimize the risk of spreading infections, especially in healthcare environments.

Pruritic Vesicular Eruptions

Skin outbreaks characterized by small, fluid-filled blisters that cause severe itching.