Which of the Following Is TRUE of Changes in Cash

question 213

Multiple Choice

Which of the following is TRUE of changes in cash discount period?

• A)If a firm decreases its cash discount period,the sales are expected to decrease,the bad debts are expected to increase,and the profit per unit is expected to increase.
• B)If a firm decreases its cash discount period,the sales are expected to increase,the bad debts are expected to increase,and the profit per unit is expected to decrease.
• C)If a firm increases its cash discount period,the sales are expected to decrease,the bad debts are expected to decrease,and the profit per unit is expected to increase.
• D)If a firm increases its cash discount period,the sales are expected to increase,the bad debts are expected to decrease,and the profit per unit is expected to increase.

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Definitions:

Deductible IRA Contribution

A contribution to an Individual Retirement Account (IRA) for which the taxpayer can claim a tax deduction, subject to certain conditions and limits.

Pension Plan

A retirement plan funded by employers or employees, or both, paying out a fixed sum to retirees, often based on salary and years of service.

AGI

Short for Adjusted Gross Income; it is your gross income after adjustments and deductions, crucial for tax calculations.

Deductible IRA Contribution

A contribution to an Individual Retirement Account that can be subtracted from gross income, reducing taxable income.