2. Which of the following is true with respect to useful lives?

	a.	Increasing useful life affects the company's annual reported net income.
	b.	Decreasing useful life positively affects the company's annual reported net income.
	c.	A company cannot change an asset's useful life after acquisition and depreciation has begun.
	d.	The selected useful life of an asset does not affect annual reported net income.

3. Which of the following may impact a company's credit policy?

1. Increased competition forces the company to increase sales.
2. In a good economy the risk of non-payment by customers is lower.
3. Cost of extending credit decreases as the economy deteriorates.

	a.	1 and 2
	b.	1 and 3
	c.	2 and 3
	d.	1, 2, and 3

4. If a company's collection period for accounts receivable is considered excessively long, then

	a.	the company should consider examining its billing procedures in order to expedite cash collection from customers.
	b.	the company may want to invest excess cash from receivable collections in the stock market.
	c.	the company should disallow customer returns to increase the collection of cash.
	d.	the company's cash flows from operations will probably be more than sufficient.