Considering Each Action Independently and Holding Other Things Constant, Which

question 34

Multiple Choice

Considering each action independently and holding other things constant, which of the following actions would increase a firm's discretionary financing needed (the need for additional capital) ?

• A) A decrease in the firm's accounts receivable average collection period
• B) An increase in the firm's profit margin
• C) A decrease in the firm's inventory turnover
• D) A decrease in the expected growth rate in sales

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Definitions:

Account Recorded

This refers to the entry or documentation of financial transactions in the appropriate accounts within a company's financial records.

Services Performed

Tasks or activities that are completed by a business or individual for compensation, often in the context of providing professional, maintenance, or consultancy services.

Cash Recorded

Cash recorded refers to the recording of cash transactions in the financial ledgers and accounts of a business, providing a trackable record of all cash movements.

Cash Payments Journal

A financial journal that tracks all cash outlays of a business, including expenses, asset purchases, and debt repayments.