Which of the Following Is NOT an Activity of Working

question 60

Multiple Choice

Which of the following is NOT an activity of working capital management?

• A)Establishing the firm's receivable policies
• B)Establishing the firm's payment policies
• C)Choosing the appropriate level of inventory
• D)Choosing the appropriate mix of long-term debt and equity

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Definitions:

Receivables Turnover Ratio

A financial metric that measures how efficiently a company collects its outstanding receivables over a period, calculated as sales divided by average accounts receivable.

Uncollectible Account

Accounts receivable that are deemed irrecoverable and are written off as a loss because the debtor is unable to pay.

Selling Inventory

The process of converting a company's inventory into sales or revenue, typically reflecting the cost of goods sold and revenue generated.

Bank Reconciliation

The process of matching and adjusting the balance of an entity's bank account against its financial records to ensure accuracy.