Other things equal, the days sales outstanding (DSO) of Firm A is 20 days and the days sales outstanding (DSO) of Firm B is 30 days. Which of the following statements about the firms is correct??

A. ?Firm A takes more time to collect its receivables than Firm B.
B. ?Firm A has tighter credit terms than Firm B.
C. ?Firm A has a weaker collection team than Firm B.
D. ?Firm A provides less discount to its customers to pay its bills early than Firm B.
E. ?Firm A has weaker receivables monitoring system than Firm B.


Answer: B

Business

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