The DSO and the Aging Schedule Are Two Common Methods

question 54

Multiple Choice

The DSO and the aging schedule are two common methods for monitoring receivables.When are they misleading?

• A)when customers' payments patterns are changing
• B)when sales fluctuate seasonally
• C)when some customers take the discount and others do not
• D)when sales are relatively constant, both seasonally and cyclically

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Definitions:

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

Ingredients

The individual components or substances that are combined to create a final product, especially in food.

Bakery

A place of business where baked goods such as bread, cakes, and pastries are produced and sold.

Additional Costs

Expenses incurred beyond the initial purchase price or budgeted amounts, often unexpected or unplanned for.