Which of the Following Statements Is True Given the Data

question 177

Multiple Choice

Which of the following statements is true given the data below?
$$\begin{array} { | l | r | r | } \hline & \text { Company A } & \text { Company B } \\\hline \text { Sales } & \$ 250,000 & \$ 400,000 \\\hline \text { Ending Accounts Receivable } & \$ 55,000 & \$ 55,000 \\\hline\end{array}$$

• A) Both companies have the same degree of liquidity with regard to their accounts receivables
• B) Company A is likely to collect account receivables more quickly than Company B
• C) Company B is likely to collect account receivables more quickly than Company A
• D) Company A and Company B will likely collect account receivables at the same time
• E) It is impossible to estimate how much time it will take for these companies to collect their receivable based on the given information

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Definitions:

Business Organization

A legal entity formed to conduct business, such as a corporation, partnership, or sole proprietorship.

Wyoming

A state in the western United States known for its wide-open spaces, mountains, and national parks.

Uniform Limited Liability Company Act

A comprehensive statute that provides a legal framework for the formation, operation, and dissolution of limited liability companies (LLCs) in the jurisdictions that adopt it.

Operating Agreement

Operating agreement is a legal document outlining the governance and operating procedures of a limited liability company (LLC), including the rights and responsibilities of the members.