Answered: does a firm need to do to improve…

Business

Accounting

does a firm need to do to improve liquidity

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

What does a firm need to do to improve liquidity?

Extend credit terms to customers in order to gain more sales

Stock up on inventory in order to never run out of stock

Pay all bills and payables when due

Speed up collection of accounts receivable from customers

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

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