Company a Has a Higher Days Sales Outstanding Ratio Than

question 125

Multiple Choice

Company A has a higher days sales outstanding ratio than Company B.Therefore,

• A) Company A sells more on credit than Company B.
• B) Company A has a higher percentage of cash to credit sales than Company B.
• C) Company A must be collecting its accounts receivable faster than Company B, on average.
• D) other things being equal, Company B has a cash flow advantage over Company A.

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Definitions:

Escapism

The practice of seeking distraction and relief from unpleasant realities, especially by engaging in entertainment or fantasy.

World System Theory

A multidisciplinary, macro-scale approach to world history and social change that suggests there is a world economic system in which some countries benefit while others are exploited.

Peripheral Country

A term used in world-systems theory to describe countries that are less developed economically and are often exploited by more developed core countries through trade and labor.

Core Country

Nations that are economically developed with a high standard of living and significant influence on global economic and political decisions.