Heaton Corp

question 75

Multiple Choice

Heaton Corp.sells on terms that allow customers 45 days to pay for merchandise.Its sales last year were $425,000,and its year-end receivables were $60,000.If its DSO is less than the 45-day credit period,then customers are paying on time.Otherwise,they are paying late.By how much are customers paying early or late? Base your answer on this equation: DSO - Credit period = days early or late,and use a 365-day year when calculating the DSO.A positive answer indicates late payments,while a negative answer indicates early payments.

• A)6.20
• B)6.53
• C)6.86
• D)7.20

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Definitions:

Internal Communication

The exchange of information and messages within an organization among its members.

Awareness

The state or condition of being conscious of something, including perceiving, understanding, and being informed.

Sender's Signature

The written or electronic endorsement by the sender on a document, indicating approval or authentication.

Business Letter

A formal document typically used for communication between companies or between a company and its clients, suppliers, or other external parties.