Accounts Receivable Information for Specific Customers Is Important Because It

question 75

Multiple Choice

Accounts receivable information for specific customers is important because it reveals:

• A)How much each customer has purchased on credit.
• B)How much each customer has paid.
• C)How much each customer still owes.
• D)The basis for sending bills to customers.
• E)All of the options are valid reasons.

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Definitions:

Cost of Goods Sold

The immediate financial outlays involved in the manufacture of goods a company sells, such as labor and material expenses.

Price-Earnings Ratio

A valuation metric that compares a company's share price to its earnings per share.

Market-to-Book Ratio

The market-to-book ratio compares a company's market value (or capitalization) to its book value of equity, indicating how valued a company is in comparison to its accounting values.

Debt-Equity Ratio

The debt-equity ratio shows the comparative amount of shareholder equity and debt financing a company uses to support its assets.