Answered: The companies dispose their accounts…

The companies dispose their accounts receivables due to a. Shortage of accounting staff b. Billing and collection expense are cos

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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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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The companies dispose their accounts receivables due to a. Shortage of accounting staff b. Billing and collection expense are costly c. There are other ways to earn cash d. The accounts receivable are all good

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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3.-The objective of accounts receivable management is to collect receivables as soon as possible without losing sales by applying high-pressure collection techniques. True or false?
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E8B. ACCOUNTING CONNECTION Developing a convenient means of reimbursing sales representatives with cash for their incidental expenses, such as for meals and supplies, is a problem many companies face. Under one company's plan, the sales representatives submit the receipts for reimbursement to the petty cash custodian. The representative then receives cash from the petty cash fund. What is the weak point in this system? What fundamental principle of internal con- trol is being ignored? What improvement in the procedure can you suggest?
The percentage of accounts receivable that is uncollectible can be ignored for cashbudgeting becausea. no cash is received from an account that defaults.b. it is included in cash sales.c. it appears on the budgeted income statement.d. for most companies, it is not a material amount.e. None of these.
The new bookkeeper forgot to record the payment of an accounts payable to a supplier. What impact does this have on the company’s books? No effect Cash is understated/the Income Statement is understated Cash is overstated/the Income Statement is overstated Cash is overstated/liabilities are understated Cash is overstated/liabilities are overstated
The Cash Over and Short account: Multiple Choice Is used to record the income effects of cash overages and cash shortages. Is not necessary in a computerized accounting system. Can never have a credit balance. Is used when the cash account reports a credit balance. Can never have a debit balance.
Credit Policy is not always important in order to manage accounts receivables. * True False
A trial balance does not balance. The owner believes the following mistakes WOULD cause animbalance. Do you agree? (Answer TRUE or FALSE for each statement) A. The owner forgot to record a cash saleB. A credit sale was recorded as a debit to sales and a debit to trade receivablesC. When transferring the bank overdraft from the Cash T account it was entered on thedebit side of the trial balanceD. Rates expense of £500 was debited to rent expenses and credited to cashE. A payment to a supplier of £690 was entered to cash as £690 but to trade payables as£609