AICPA CPA-Business Exam - Topic 1 Question 44 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 44
Topic #: 1

An increase in sales collections resulting from an increased cash discount for prompt payment would be expected to cause a (n):

AIncrease in the operating cycle.

BIncrease in the average collection period.

CDecrease in the cash conversion cycle.

DIncrease in bad debt losses.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. An increase in sales collections would decrease the cash conversion cycle.

Choice 'a' is incorrect because the operating cycle (as well as the cash conversion cycle) would decrease.

Choice 'b' is incorrect, as the average collection period would decrease.

Choice 'd' is incorrect. Bad debt losses would decrease from an increase in sales collections.

by Delmy at May 07, 2022, 11:56 PM

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5 months ago

Hmm, I'm a bit unsure about this one. The defects all seem related to buying a bus ticket, but I'll need to think carefully about which one is truly out of scope.

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This is a tricky one. There are a lot of moving parts, and I want to make sure I don't miss anything important. I'm leaning towards option D since it seems to have the most comprehensive set of viewpoints to tackle the key concerns, but I'll double-check the details of each choice to be sure.

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Refugia

5 months ago

Hmm, this seems like a networking question. I'll need to think carefully about the different entities used in networking devices.

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Lachelle

5 months ago

Hmm, this seems like a straightforward question about entity ownership. I'll need to think carefully about the requirements - transactional data and association with business units. That should help me determine the best ownership type.

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AICPA CPA-Business Exam - Topic 1 Question 44 Discussion

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