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:

Paris Parlement

The supreme court of justice in pre-revolutionary France, known for registering royal edicts and sometimes resisting the king's authority by refusing to register policies.

National Assembly

is a legislative body in various countries, and it is often the lower house of a bicameral legislature or a unicameral legislature.

Estates-General

The legislative body in pre-revolutionary France made up of representatives of the three estates: the clergy, the nobility, and the commonpeople.

Third Estate

The common people of France who were not part of the clergy or nobility, representing the vast majority of society and leading the charge in the French Revolution.