Which of the Following Indicates an Improvement in the Management

question 33

Multiple Choice

Which of the following indicates an improvement in the management of accounts receivable?

• A) An increase in the average collection time for accounts receivable.
• B) A change in the average collection period from 34 days to 39 days.
• C) An extension of the time taken to collect debts to beyond the allowed credit period.
• D) A change in the number of times debtors are turned over per year from 8.32 times to 10.85 times.

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Definitions:

Weighted-Average Method

An inventory costing method that averages the cost of inventory available for sale with the cost of goods sold to determine the cost of ending inventory and cost of goods sold.

Welding Department

A specialized segment within a manufacturing facility where welding processes are conducted, often accounted for separately in cost and production analyses.

Weighted-Average Method

The weighted-average method is an inventory costing method that assigns a weighted average cost to the inventory items based on the cost of goods available for sale and the units available.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the expenses necessary to convert raw materials into finished goods.