What does a decrease in Accounts Receivable days likely indicate?

a. Sales increase. b. Recession. c. Competitor terms lengthen. d. Focus on collections.

What does a decrease in Accounts Receivable days potentially indicate?

I. Improved collection procedures. II. The use of more liberal selling terms to promote sales. III. The use of more restrictive selling terms. IV. Increased competitive pressures in the marketplace.

a. III and IV only. b. IV only. c. I and III only. d. I only.

Which statement about Accounts Payable is correct?

a. They reflect sales made that are paid for in cash. b. They normally appear as current assets on the balance sheet. c. They arise from the purchases of such items as raw materials. d. They reflect amounts owed to a business by its customers.

Which statement correctly describes the relationship between the Inventory days and loan return?

a. The lower the Inventory days, the higher the financial risk and the lower the loan return. b. The higher the Inventory days, the higher the financial risk and the higher the loan return. c. The higher the Inventory days, the lower the financial risk and the lower the loan return. d. The lower the Inventory days, the lower the financial risk and the higher the loan return.