Which of the Following Statements Is CORRECT

question 23

Multiple Choice

Which of the following statements is CORRECT?

• A)If a security analyst saw that a firm's days' sales outstanding (DSO) was higher than the industry average, and was increasing and trending still higher, this would be interpreted as a sign of strength.
• B)A high average DSO indicates that none of its customers are paying on time. In addition, it makes no sense to evaluate the firm's DSO with the firm's credit terms.
• C)There is no relationship between the days' sales outstanding (DSO) and the average collection period (ACP). These ratios measure entirely different things.
• D)A reduction in accounts receivable would have no effect on the current ratio, but it would lead to an increase in the quick ratio.
• E)If a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its days' sales outstanding will decline.

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Definitions:

Deviant Behavior

Actions that violate the norms or expectations of a society or community, which can range from minor infractions to serious crimes.

Labeled

The process of classifying or categorizing something based on certain characteristics or perceived attributes.

Deviant Behavior

Involves actions or behaviors that violate social norms, including formally enacted rules as well as informal violations of social norms.

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Officials responsible for supervising individuals sentenced to probation instead of or after serving time in prison, ensuring compliance with probation conditions.