Which of the Following Is True for a Critical Activity

question 27

Multiple Choice

Which of the following is true for a critical activity?

• A) ES = EF
• B) EF = LS
• C) LF = LS
• D) ES = LS

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Definitions:

Trade Credit Terms

Trade credit terms are the conditions agreed upon between a buyer and seller regarding the payment for goods or services, including the repayment period and any discounts for early payment.

Discount

The reduction in the price of goods or services, usually offered to prompt sales or because the product is damaged, outdated, or in less demand.

Restricted Policy

A policy under which holdings of cash, securities, inventories, and receivables are minimized.

Relaxed Policy

A policy under which relatively large amounts of cash, marketable securities, and inventories are carried and under which sales are stimulated by a liberal credit policy, resulting in a high level of receivables.