Which One of the Following Statements Is Correct If a Firm

question 46

Multiple Choice

Which one of the following statements is correct if a firm has an accounts receivable turnover measure of 10?

• A)It takes the firm 36.5 days to pay its creditors.
• B)It takes the firm 36.5 days to sell its inventory and collect payment from the sale.
• C)It takes the firm 36.5 days to collect payment for a sale.
• D)The firm has 10 times more in accounts receivable than it does in cash.
• E)It takes an average of 10 days to collect payment from the firm's customers.

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Definitions:

Farmers

Individuals or entities involved in the practice of agriculture, raising living organisms for food or raw materials.

Farm Subsidies

Government payments or other support extended to farmers to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

Parity Concept

The idea that year after year the sale of a specific output of a farm product should enable a farmer to purchase a constant amount of nonagricultural goods and services.

Parity Concept

A principle in economics that suggests prices, incomes, or interest rates should equalize across different markets or countries, adjusted for exchange rates.