Which of These Is NOT a Recommended Policy for Managing

question 84

Multiple Choice

Which of these is NOT a recommended policy for managing accounts receivable?

• A)Maintaining constant "aging" of customers to quickly identify the ones who may become delinquent.
• B)Using your bank as a lock box for the receipt of payments.
• C)Enforcing significant late fees and interest on past due accounts.
• D)Discontinuing credit sales to customers who become significantly late in paying.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity or volume of production or sales, such as raw materials and direct labor.

Break-even Point

The point at which total revenues equal total expenses, indicating that a business is neither making a profit nor incurring a loss.

Variable Costs

Expenses that change in proportion to the activity of a business, such as material or labor costs related to production levels.

Budgeted Salary

A predetermined amount of money allocated for salaries over a specific period, used for planning and controlling payroll expenses.