Which of the Following Statements Is Correct

question 168

Multiple Choice

Which of the following statements is correct?

• A) Other things held constant,the higher a firm's days sales outstanding (DSO),the better its credit department.
• B) A firm will relax its credit standards only if it expects bad debts will not increase because of the change.
• C) If a firm which sells on terms of "net 30" changes its policy and begins offering all customers terms of "2/10,net 30," and if no change in sales volume occurs,then the firm's DSO will probably increase.
• D) If a firm sells on terms of 2/10,net 30,and its DSO is 30 days,then its aging schedule would probably show some past due accounts.
• E) Statements a,b,c,and d are all false.

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Definitions:

Sufficient Condition

A condition or set of conditions that, if met, guarantees that a certain state or event will occur, though it may not be necessary for the occurrence.

Causal Factor

A condition or event that directly influences the occurrence of another event or condition, serving as its cause.

Necessary Condition

A condition that must be present for an event or action to occur.

Sufficient Condition

A condition or set of conditions that guarantees the occurrence of another event or state.