The Positive (As Opposed to the Negative) Form of Receivables

question 27

Multiple Choice

The positive (as opposed to the negative) form of receivables confirmation may be preferred when:

• A) internal control surrounding accounts receivable is considered to be effective.
• B) there is reason to believe that a substantial number of accounts may be in dispute.
• C) a large number of small balances are involved.
• D) there is reason to believe a significant portion of the requests will be made.

---

Definitions:

Net 25

A payment term indicating that the full payment is due within 25 days from the invoice date.

365-Day Year

A calendar basis used in various financial calculations, assuming the year consists of exactly 365 days for simplifying interest and other time-sensitive computations.

Temporary Working Capital

The additional working capital needed to support fluctuations in business activity during peak periods.

Short-Term Debt

Liabilities or loan obligations that are due to be paid within a year.