question 5-2

Which of the following statement is true ?   Answer choices : I. Increase in collection of cash from customer will lead to decrease in days of payable outstanding . II . Increase in credit sales of the company will lead to increase in days of payable outstanding . III . Decrease in average accounts payable will cause decrease in accounts payable turnover ratio . IV . All the above statements are false .

What is a possible reason for accounts receivable turnover to increase from one year to the next year? Granting credit to customers with lower credit quality. Decreased credit sales during a recession. Improved collection process. Write-off uncollectible receivables.

Question Which of the following changes in credit standards and conditions would cause an improvement in profit? A) Increase in the turnover of accounts receivable B) Decrease in units sold C) Increase in collection expenses D) An increase in the percentage of doubtful accounts receivable.

1.-The only effect of a change in the investment of accounts receivable is the extra interest to be paid to finance increases or the interest saved by lowering the investment. Yes or no?

A high accounts receivable turnover indicates. a. customers are making payments quickly b. a large portion of the company's sales are on credit c. many customers are not paying their receiveables d. the comapany's sales have increased

Statement I - Relaxation of Credit Standard increases the Investment in Accounts receivableStatement II - Restriction of credit standard may decrease the chance of incurring bad debts that ultimately affects the profit positively a. False; True b. True; False c. False; False d. True; True   Which of the following statements is most correct? a. Other things held constant, the higher a firm’s days sales outstanding (DSO), the better its credit department. b. If a firm sells on terms of 2/10, net 30, and its DSO is 30 days, then its aging schedule would probably show some past due accounts. c. If a firm that sells on terms of net 30 changes its policy and begins offering all customers terms of 2/10, net 30, and if no change in sales volume occurs, then the firm’s DSO will probably increase.

Which of the following statements is false? O A. A positive cash conversion cycle means the company is paying its payables before receiving its receivables. B. A negative cash conversion cycle means the company is collecting its receivable before paying its payables. C. The cash conversion cycle is the length of time required for the company to recieve its inventory and then receive cash from the sales of its inventory. D. All of the above statements are true.

An increase in the current account deficit will place ____ pressure on the home currency value, other things equal. A. upward B. downward C. no D. upward or downward (depending on the size of the deficit)

What is the effect of extending the collection period for accounts receivable? The collection cost will be reduced. Cash flows from operations may be higher than expected for the company’s sales. The company should expand operations with its excess cash. Bad debt expense will generally be higher.

Question  Select three answers for changes in credit standards that are causes of changes in profits: A) Decrease in sales volume.  B) Applying an aging analysis of balances C) Increase in contribution margin D) Increase in financial expenses due to an increase in the interest rate. E) Granting of discounts to incentivize prompt payment F) Increase in the investment in accounts receivable.

Question Which of the following changes in credit standards and conditions would cause an improvement in profit? A) An increase in the percentage of doubtful collections. B) An increase in collection expenses. C) Decrease in units sold D) Increase in the turnover of accounts receivable.

4.-Which of the following changes in credit standards and terms would cause a decrease in profit? A) Decrease in customers taking advantage of the discount. B) Increase in average collection period days. C) Increase in units sold. D) Decrease in the % of uncollectible accounts.

Please list The potential accounting errors or operating problems that might have caused the unexpected fluctuations for each of the accounts below:   1. COGS-Change in COGS larger than change in sales. COGS increasing faster than sales. Still profitable but it could be a troubling sign if trend continues. May not stay profitable for long 2. WARRANT EXPENSE- why warranty expense can be increased? 3. Interest expense- Why is it important to confirm that if interest expense declined, debt must be also decreasing? 4. Income before taxes- declining 5. Income tax expense-declining 6. Net income-net income and gross profit decreased 7. Cash-drastic increased and then declined in another year 8. Accounts Receivable-Increased year to year 9. Prepaid expensed-Sudden decrease and then sudden shoot

A change in credit policy has caused an increase in sales, an increase in discounts taken, a reduction in the investment in accounts receivable, and a reduction in the number of doubtful accounts. Based upon this information, we know that a)Net income has increased b)The average collection period has decreased. c)Gross profit has declines d)The size of of the discount offered has increased

TB MC Qu. 5-62 (Static) What is the primary disadvantage of extending... What is the primary disadvantage of extending credit to customers? Multiple Choice O Lower revenues Reduced operating efficiency O Lower profitability Delay or failure to collect cash

19. Company ABC factored its accounts receivable with a financing vendor using a "with recourse" arrangement.  What impact might this have on the company? Group of answer choices anger vendors due to later payment Improve cash conversion cycle reduce bad debt Increase days sales outstanding

Match the term with its definition. Allowance Method Cash Factoring Net Realizable Value Percentage-of-Receivables Method Restricted Cash A procedure that records unc [Choose ] Time Elapsed: Hide Time Attempt due: Apr 7 at 11:59pm 18 Hours, 38 Minutes, 32 Seconds The amount of the accounts receivable balance that the company actually expects to receive. Correct Answer A procedure that records uncollectible accounts by recording the bad debt expense on an estimated basis in the accounting period in which the sale on accout takes place. C A method of selling accounts receivable where the seller guarantees payment to the purchaser in the event the debtor fails to pay. Correct Answer short term investments with a maturity date of three months or less Generated through transactions from customers for goods bought or services rendered. Correct Answer When material, is required to be segregated and shown as either a current or long term asset on the balance sheet depending on it's expected…