Which of the Following Statements Is FALSE

question 22

Multiple Choice

Which of the following statements is FALSE?

• A)The aging schedule is also sometimes augmented by analysis of the payments pattern,which provides information on the percentage of monthly sales that the firm collects in each month after the sale.
• B)Because accounts receivable days can be calculated from the firm's financial statement,outside investors commonly use this measure to evaluate a firm's credit management policy.
• C)If the aging schedule gets "top-heavy"-that is,if the percentages in the upper half of the schedule begin to increase-the firm will likely need to revisit its credit policy.
• D)Seasonal sales patterns may cause the number calculated for the accounts receivable days to change depending on when the calculation takes place.

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Definitions:

Co-Insurance Clause

A provision in an insurance policy that requires the policyholder to bear a portion of the risk by paying a percentage of the total claim amount.

Insurance Company

A financial institution that provides a wide range of insurance policies to protect individuals and businesses against potential loss.

Responsibility for Loss

The obligation to bear the financial or material loss suffered due to specific actions, negligence, or unforeseen events.

Premium

The amount paid for an insurance policy or the additional amount above the nominal value of a security or investment.