If a Firm's Sales and Those of Its Customers Are

question 148

True/False

If a firm's sales and those of its customers are closely correlated with economic conditions,it is possible for a firm's total investment in accounts receivable to decrease while its days sales outstanding increases.

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Definitions:

Salaries Payable

The amount of salary expenses that have been incurred by a company but have not yet been paid to employees, classified as a liability.

Operating Activities

Day-to-day actions that relate to producing and delivering a company’s products and services, forming the primary source of revenue.

Future Cash Flows

Future cash flows refer to the estimated monetary inflows and outflows a company expects to receive or pay out in the future, playing a critical role in financial planning and analysis.

Operating Activities

Operating activities refer to the day-to-day functions of a business involved in producing and selling its goods or services, which are reflected in its cash flow.