Linda works in an accounts payable department. She has attempted to convince her boss to take the discount on the 3/10 net 45 credit terms mostsuppliers offer, but her boss argues that giving up the 3% discount is less costly than a short-term loan at 14%. Advise the boss about the least cost offinancing.]b. Analyse the spontaneous sources of short-term financing and unsecured sources of short-term loans

Trade credit is an agreement between supplier and the buyer in which the buyer promises to pay the…

Answered: Linda works in an accounts payable…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 6TP: When a customer is delinquent on paying a notes receivable, your company has the option to continue...

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A credit manager who is concerned about a client's viability might take all of the following steps except for the following: O require monthly billing terms O require the client post a letter of credit O require COD terms O require CBD tems Question 4 The Treasurer of a corporation is negotiating with one of his / her suppliers to allow the corporation to have 30 days to pay supplier's invoices. The Treasurer is arranging: O cash discount terms O Short term financing O commercial paper O a factoring of receivables
Lawyer Lemon, a Jacksonville lawyer, specializes in what he calls credit management law. Thatis, he aids clients with bad credit ratings to improve their status with the major purveyors ofcredit information. If a client's credit rating improves, then the client can get loans that he orshe previously could not have gotten. Lemon's business is a little thin, so he decides toadvertise his services. The text of his ad reads as follows:"Has Bad Credit Got You Down? Come and see Lou Lemon, Attorney at Law, to get a goodcredit ratingFast, faster, fastest credit lawyer in town. Results Guaranteed!Call Lou Lemon today at (904) 343-2929."Which of the following is most correct?O A. If Lemon eliminates the first line of his ad, then the ad will be PROPER.C B. If Lemon eliminates the second line of his ad, then the ad will be PROPER.C. Lou MAY use the ad in brochures, but not on the radio or t.v.D. If Lemon uses the ad as written, he will be SUBJECT TO DISCIPLINE.
An employee opens customer payments, records them, and delivers the deposit to the bank is pressure, opportunity or rationalization? An employee earns minimum wage and has a many student loans to payoff is pressure, opportunity or rationalization?
Second Republic Bank is a lending company that operates in the Southeastern United States. Current economic conditions have kept lending rates low, whichlimits the revenue potential for Second Republic. The bank manager, Vivian Caldwell is concerned about understanding and then controlling costs, and shedecided to try out time-driven ABC. As a pilot, she decided to focus on understanding the cost of taking a customer’s loan application. Vivian knew that it tooklonger to collect applicant information for a mortgage than it did for other types of loans, like auto loans or unsecured loans, but did not know the cost differences,so she collected the following information from a regional branch office.There are two loan application specialists, each earning $112,320 per year. Vivian determined that fringe benefits average 10% of salary and that the officesupport costs for an employee (computer, office space, etc.) in that regional branch averaged $16,848 per employee. Factoring in time off…
Second Republic Bank is a lending company that operates in the Southeastern United States. Current economic conditions have kept lending rates low, which limits the revenue potential for Second Republic. The bank manager, Vivian Caldwell is concerned about understanding and then controlling costs, and she decided to try out time-driven ABC. As a pilot, she decided to focus on understanding the cost of taking a customer's loan application. Vivian knew that it took longer to collect applicant information for a mortgage than it did for other types of loans, like auto loans or unsecured loans, but did not know the cost differences, so she collected the following information from a regional branch office. There are two loan application specialists, each earning $55,000 per year. Vivian determined that fringe benefits average 30% of salary and that the office support costs for an employee (computer, office space, etc.) in that regional branch averaged $5,300 per employee. Factoring in time…
Suppose Beth comes into a large sum of money and decides to lend it out to earn interest on it. Because she lacks the expertise to evaluate the credit risks of potential borrowers, she decides to deposit the money in her local bank, a financial intermediary. This is an example of how financial intermediaries can help solve the problem of: Adverse selection Fractional reserve banking Insolvency O Time deposit
Your company provides credit to customers. Someof these customers default on their loans, with verynegative implications for you. Describe how you coulduse discriminant analysis to learn what distinguishesthe customers who default on their loans from thosewho pay back their loans. How might you use such amodel?
You are working as a summer intern at a rapidly growing organic food distributor. Part of your responsibility is to assist in the accounts payable department. You notice that most bills from suppliers are not paid within the discount period. The manager of accounts payable says the bills are organized by vendor, like the accounts payable ledger, and she is too busy to keep track of the discount periods. Besides, the owner has told her that the 1% and 2% discounts available are not worth worrying about.
You are working as a summer intern at a rapidly growing orgainc food distribution. Part of your responsibility is to assist in the accounts payable department. You notice that most of the bills are not paid with in discount period. The manager of the accounts payable sees the bills are organized by vendor, like the accounts payable ledger, and she is too busy to keep track of the discounts period. Besides, the owner has told her that The 1% and 2% discount available or not worth worrying about. 1. Explain to the owner why it is expensive not to take it advantage to cash discounts on credit purchases. suggest a way to file (organize) suppliers invoices so that they are paid with in the discount period.
As Loren is preparing the end of year financial statements, she realizes that the earnings are not quite high enough to justify the large loan application that is being currently processed. She decides to stretch the assumptions just enough to be able to meet the requirements for the loan application. This is an example of:
Shanice works in finance for a small manufacturing company and is working on next year’s budget. She has been doing research to compare the cost of outsourcing some upcoming jobs versus the cost of purchasing the equipment to keep the jobs in-house. In what step in financial planning is Shanice involved? Multiple Choice O. developing financial statements for outside investors O. forecasting short-term financial needs O. establishing financial controls and tax policy O. forecasting long-term financial needs
Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financial statements before approving the loan. Required: Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank. 8 00-45-49 Costs Product Cost / Period Cost 1. Depreciation on salespersons' cars. 2. Rent on equipment used in the factory. 3 lubricants used for machine maintenance Salaries of personnel who work in the finished goods warehouse 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors' salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9. Advertising…

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