Which of the Following Statements Is NOT True Regarding Accounts

question 40

Multiple Choice

Which of the following statements is NOT true regarding accounts receivable turnover?

• A)In general, the higher the ratio, the better.
• B)If the accounts receivable turnover ratio is too high, this may indicate that credit is too tight and the company may be losing sales to good customers.
• C)Accounts receivable turnover is computed by dividing net sales by end of the year receivables.
• D)Accounts receivable turnover is computed by dividing net sales by average accounts receivable.

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Definitions:

Express Authority

Legal power granted explicitly to an agent or representative by a principal, allowing them to act on the principal's behalf.

Respondeat Superior

A legal doctrine that holds an employer or principal legally responsible for the wrongful acts of an employee or agent, if such acts occur within the scope of the employment or agency.

Liability

The state of being responsible for something, especially by law.

Tort

A civil wrong causing harm to someone, for which the injured party can seek legal remedies or damages.