Other Things Held Constant, Which of the Following Would Tend

question 28

Multiple Choice

Other things held constant, which of the following would tend to reduce the cash conversion cycle?

• A) place larger orders for raw materials to take advantage of price breaks.
• B) take all cash discounts that are offered.
• C) continue to take all cash discounts that are offered and pay on the net date.
• D) offer longer payment terms to customers.
• E) carry a constant amount of receivables as sales decline.

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Definitions:

Disbursements

Payments made by a business or organization, often involving the distribution of funds, such as payroll or expense reimbursements.

Certificate

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A payment type in partnerships where a partner is assured a certain amount regardless of the firm's profitability.

Accounting Process

The systematic series of steps followed in the accounting profession to track and record financial transactions and prepare financial statements.