Which of the Following Statements Is FALSE

question 34

Multiple Choice

Which of the following statements is FALSE?

• A)After a firm decides on its credit standards, it must next establish its credit terms.
• B)An ageing schedule categorises accounts by the number of days they have been on the firm's books.
• C)The decision of how much credit risk to assume plays a large role in determining how much money a firm ties up in its payables.
• D)Knowledge of the payments pattern is also useful for forecasting the firm's working capital requirements.

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Definitions:

Statement of Comprehensive Income

A financial statement that includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Net Income

Company's earnings following the removal of all operational costs and taxes from its incoming revenue.

Other Comprehensive Income Items

Components of comprehensive income that are not part of net income, including items such as unrealized gains and losses on available-for-sale securities.

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core activities.