Which of the Following Is Most Likely to Be an Advantage

question 71

Multiple Choice

Which of the following is most likely to be an advantage of a start-up?

• A) It begins with a clean slate.
• B) It has initial name recognition.
• C) It is easy to establish and it immediately provides positive cash flow.
• D) It has easy access to revolving credit.

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Definitions:

Average Collection Period

The average time it takes for a company to receive payments owed by its customers.

Net Sales

Revenue from sales after deducting returns, allowances for damaged goods, and discounts.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered on credit.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and record bad debts expenses.