Which Statement Best Describes DSO and Aging

question 38

Multiple Choice

Which statement best describes DSO and aging?

• A)If a firm's volume of credit sales declines, then its DSO must also decline.
• B)If a firm changes its credit terms from 1/20, net 40, to 2/10, net 60, the impact on sales can't be determined because the increase in the discount is offset by the longer net terms, which tends to reduce sales.
• C)The DSO of a firm with seasonal sales can vary. While the sales per day calculation is usually based on the total annual sales, the accounts receivable balance will be high or low depending on the season.
• D)An aging schedule is used to determine what portion of customers pay cash and what portion buy on credit.

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Definitions:

Self-Disclosure

The act of revealing personal, private, or sensitive information about oneself to others.

Nonverbal Cues

Forms of communication without words, such as gestures, facial expressions, and body language, that convey messages or emotions.

E-Body Language

This term refers to non-verbal cues and signals people use when communicating electronically, such as through email or social media, including the use of emojis, punctuation, and capitalization to convey mood or emphasis.

Correspondence

The act of communicating by writing or email, typically involving an exchange of letters or messages.