Which One of the Following Will Tend to Decrease the Length

question 73

Multiple Choice

Which one of the following will tend to decrease the length of the credit period?

• A)Decrease in default risk
• B)Increase in the cost of the product
• C)Increase in competition
• D)Decrease in the size of the account
• E)Decrease in turnover rate

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Definitions:

Estimated Method

The estimated method is an accounting technique used to approximate the value of certain items or financial outcomes when exact figures are unavailable or impractical to determine.

Natural Disaster

A major adverse event resulting from natural processes of the Earth, such as floods, hurricanes, earthquakes, or volcanic eruptions, that can cause significant damage or loss of life.

Inventory Records

Documents that track the quantities, conditions, and locations of products a company has in stock, including raw materials, work-in-process, and finished goods.

Days' Sales in Inventory

A financial ratio indicating the average number of days it takes a company to sell its entire inventory in a given period.