If the Average Accounts Receivable That a Firm Holds Decreases

question 45

Multiple Choice

If the average accounts receivable that a firm holds decreases without any decrease in credit sales, the operating cycle will:

• A) stay the same because of no sales change.
• B) stay the same because cash collections are sooner and it will affect the cash cycle only.
• C) decreases because days sales outstanding decreases.
• D) stay the same because accounts receivable are not in the operating cycle.

Distinguish between correct and incorrect spellings of words with similar sounds.

Comprehend the impact of suffix addition on the meaning and form of the base word.

Recognize the correct spelling patterns for words ending in '-ed', '-ing', '-s', '-es', and other common suffixes.

Understand the concept of doubling consonants before adding a suffix in specific words.

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Inventory

Items of value held by a company for the purpose of sale or production, including raw materials, work-in-progress, and finished goods.

Lost Sales

Revenue that a company could have earned but didn't because of not having enough stock, closing an order, or other reasons.