Which of the following is not correct for a firm with seasonal sales and customers who all pay promptly at the end of 30 days?
A) DSO will vary from month to month.
B) The quarterly uncollected balances schedule will be the same in each quarter.
C) The level of accounts receivable will be constant from month to month.
D) The ratio of accounts receivable to sales will vary from month to month.
E) The level of accounts receivable at the end of each quarter will be the same.

Question

Quizplus · Accepted Answer

For a firm with seasonal sales, the level of accounts receivable will fluctuate with sales, so it will not be constant from month to month.

Which of the Following Is Not Correct for a Firm