Sunday, November 10, 2019

Which one of the following actions will tend to increase the accounts receivable period? Assume the accounts receivable period is currently 34 days.


Which one of the following actions will tend to increase the accounts receivable period? Assume the accounts receivable period is currently 34 days. 
 
A. 
tightening the standards for granting credit to customers

B. 
refusing to grant additional credit to any customer who pays late

C. 
increasing the finance charges applied to all customer balances outstanding over thirty days

D. 
granting discounts for cash sales

E. 
eliminating the discount for early payment by credit customers
Refer to section 18.2


31.
An increase in which one of the following is an indicator that an accounts receivable policy is becoming more restrictive? 
 
A. 
bad debts

B. 
accounts receivable turnover rate

C. 
accounts receivable period

D. 
credit sales

E. 
operating cycle
Refer to section 18.2


32.
If you pay your suppliers five days sooner, then: 
 
A. 
your payables turnover rate will decrease.

B. 
you may require additional funds from other sources to fund the cash cycle.

C. 
the cash cycle will decrease.

D. 
your operating cycle will increase.

E. 
the accounts receivable period will decrease.
Refer to section 18.2

33.
Which one of the following will increase the accounts payable period, all else constant? 
 
A. 
an increase in the cost of goods sold account value

B. 
an increase in the ending accounts payable balance

C. 
an increase in the cash cycle

D. 
a decrease in the operating cycle

E. 
an increase in the accounts payable turnover rate
Refer to section 18.2

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