Which of the Following Statements Is CORRECT

question 39

Multiple Choice

Which of the following statements is CORRECT?

• A) if a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its days' sales outstanding will decline.
• B) if a security analyst saw that a firm's days' sales outstanding (dso) was higher than the industry average and was also increasing and trending still higher, this would be interpreted as a sign of strength.
• C) if a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its days' sales outstanding (dso) will increase.
• D) there is no relationship between the days' sales outstanding (dso) and the average collection period (acp). these ratios measure entirely different things.
• E) a reduction in accounts receivable would have no effect on the current ratio, but it would lead to an increase in the quick ratio.

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Definitions:

ALCOA Case

A landmark antitrust case against the Aluminum Company of America (ALCOA), emphasizing legal issues related to monopolies and market competition.

Rule of Reason

A legal doctrine used in antitrust law that evaluates business practices based on their overall circumstances and their impact on competition, rather than deeming them inherently illegal.

Supreme Court

The highest judicial court in a country or state, often having the final word in legal disputes and constitutional issues.

Oil And Tobacco Trusts

Historical terms referring to the monopolistic organizations formed in the oil and tobacco industries to control production and prices.