Which of the Following Are Reasons Why Companies Should Monitor

question 39

Multiple Choice

Which of the following are reasons why companies should monitor accounts receivable levels carefully?

• A) to maximize costs of collection
• B) to encourage prompt payment from their customers
• C) to minimize the stress on working capital and related bank debt
• D) B and C only

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Definitions:

Safe Payments

Transactions processed securely, minimizing the risk of fraud or theft of payment information.

Journal Entry

A record of a business transaction in the accounting books of a company, detailing the financial impact.

Outstanding Liabilities

Financial obligations or debts that a company has yet to pay off. These are recorded on the company's balance sheet.

Net Income and Losses

The total profit or loss a company experiences over a specific period, calculated as total revenues minus total expenses.