An evaluation of the firm’s collection efforts based on the aging schedule would suggest ________. (See Table 14.6) A) poor credit management B) satisfactory credit management C) superior credit management D) overzealous collection efforts ANSWER A
Date: September 19th, 2020
Increased collection expenditures should reduce the investment in accounts receivable and bad debt expenses, increasing profits. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
An increase in collection efforts by a firm will result in ________ in sales volume, ________ in the investment in accounts receivable, ________ in bad debt expenses, and ________ in collection expenditures. A) an increase; a decrease; an increase; a decrease B) an increase; a decrease; a decrease; an increase C) an increase; a decrease; […]
Date: September 19th, 2020
An aging schedule breaks down accounts receivable into groups on the basis of the first letter of the name of the company that owes on the account. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A firm’s credit terms cover ________. A) credit standards B) lines of credit C) cash discount period D) credit scoring ANSWER C
Date: September 19th, 2020
The most stringent step in the collection process is ________. A) letters B) personal visits C) collection agencies D) legal action ANSWER D
Date: September 19th, 2020
The first step in the collection of overdue accounts is ________. A) a letter B) contacting a collection agency C) legal actions D) a personal visit ANSWER A
Date: September 19th, 2020
2/15 net 45 translates as ________. A) 15 percent cash discount if paid in 2 days, net 45-day credit period B) 45 percent of account due in 15 days, payment prior to day 15 receives a 2 percent discount C) 2 percent cash discount if paid prior to 15 days, if customer does not take […]
Date: September 19th, 2020
A technique that provides an analyst with the information concerning the proportion of each type of account that has been outstanding for a specified period of time is called ________. A) credit analysis B) credit scoring C) aging of receivables D) the economic order quantity model ANSWER C
Date: September 19th, 2020
Which of the following is true of cash discount? A) It increases bad debts because after availing discounts all customers may not pay. B) It decreases the investment in accounts receivable and increases the per unit profit. C) It helps to speed up collections without putting pressure on customers. D) It reduces sales because the […]
Date: September 19th, 2020
