Which One of the Following Collection Times Is Correctly Described

question 80

Multiple Choice

Which one of the following collection times is correctly described?

• A)The processing delay starts when a firm mails out a billing statement and ends when the payment is received from a customer.
• B)Mailing time begins when a firm mails out a billing statement and ends when the payment is received.
• C)Collection time begins when a firm mails out a billing statement and ends when the cash payment for that billing is available to the firm.
• D)Availability delay begins when a firm deposits a customer's check into its bank account and ends when the cash from that payment is available to the firm.
• E)Processing delay begins when a firm mails out billing statements and ends when the firm deposits the payment for that statement into its bank account.

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Definitions:

Raw Materials

The basic materials that are processed or used to manufacture goods.

Cash Disbursements

Outflows of cash for expenses, acquisitions, and other payments made by a business during a specific period.

November

The eleventh month of the year in the Gregorian calendar.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company; includes the cost of materials and labor directly used to create the product.