and practice using BioSig$-$ID ${?}^{TM}$ here.

Question $24$

$2$ pts

Which of the following statements is CORRECT?

Since receivables and payables both result from sales transactions, a firm with a high receivables$-$to$-$sales ratio must also have a high payables$-$to$-$sales ratio.

A firm that makes $90\%$ of its sales on credit and $10\%$ for cash is growing at a constant rate of $10\%$ annually. Such a firm will be able to keep its accounts receivable at the current level, since the $10\%$ cash sales can be used to finance the $10\%$ growth rate.

In managing a firm's accounts receivable, it is possible to increase credit sales per day yet still keep accounts receivable fairly steady, provided the firm can shorten the length of its collection period $($its DSO$)$ sufficiently.

Because of the costs of granting credit, it is not possible for credit sales to be more profitable than cash sales.