Which of the Following Would Be Most Responsible for a Company's

question 91

Multiple Choice

Which of the following would be most responsible for a company's average collection period being higher than the industry average?

• A)If a company's growth in sales is greater than the growth of sales in the industry.
• B)Being more aggressive in collecting its accounts receivable than its competitors.
• C)Having credit policy standards that are more restrictive than its competitors.
• D)Being more lenient in extending credit to its customers than its competitors.

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Definitions:

Corporations

Corporations are legal entities that are separate from their owners, allowing them to own assets, incur liabilities, and conduct business activities.

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability and the ability to raise capital through stock.

Stockholders

Individuals or entities that own shares in a corporation, giving them ownership interest.

Limited Risk

Exposure to a relatively small possibility of loss or less severe consequences in an investment or business activity.