Which of the following is a benefit of selling on credit? Select one: Expenses are reduced by making sales to a wide range of customers. Revenues are increased by making sales to a wider range of customers. Cash is received sooner. Some customers do not pay, creating an expense. Clear my choice

Which of the following is a benefit of selling on credit? Select one: Expenses are reduced by making sales to a wide range of customers. Revenues are increased by making sales to a wider range of customers. Cash is received sooner. Some customers do not pay, creating an expense. Clear my choice

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 11MC: Which of the following best represents a positive product of a lower number of days sales in...

See similar textbooks

Related questions

Q: Equipment was acquired at the beginning of the year at a cost of $34,750. The equipment was…

A: Depreciation Expenses are the expenses incurred on the wear and tear of the fixed assets. This is…

Q: Which of the following would not be considered a merchandising company? Retailer Wholesaler Service…

A: Merchandising company are those company which deals in trading of goods and services. Simply they…

Q: RJ Corporation has provided the following information about one of its inventory items: Number of…

A: LIFO method is one of the methods of inventory valuation in which it is assumed that recent or new…

Q: Windsor Company was formed on July 1, 2023. It was authorized to issue 314,000 shares of $10 par…

A: To prepare the stockholders' equity section of the balance sheet for Windsor Company as of June 30,…

Q: During its first year of operations, Concord Corporation had the following transactions pertaining…

A: Stockholder's Equity includes the amount contributed by shareholders in the form of common stock,…

Q: Barb’s Best Pies is based in Newtown and makes gourmet pies sold online to customers on credit (40%…

A: The objective of the question is to calculate the total credit sales for Barb’s Best Pies in the…

Q: Mr. and Mrs, Moss have major medical and dental insurance provided by Mrs. Moss's employer. Assume…

A: To compute the itemized deduction for medical expenses for Mr. and Mrs. Moss, we need to consider…

Q: Alyeska Services Company, a division of a major oil company, provides various services to the…

A: The ratio analysis is done based on the income statement, balance sheet, and a statement of cash…

Q: 4. A client placed $4,500,000 of five-year equipment into service in January 2023. Because taxable…

A: Answer:- Depreciation meaning:- The term "depreciation" describes the slow decline in an asset's…

Q: Earth's Treasures Mining Co. acquired mineral rights for $37,500,000. The mineral deposit is…

A: The objective of the question is to calculate the depletion rate, the depletion expense for the…

Q: Juniper Design Limited of Manchester, England, is a company specializing in providing design…

A: Residual income is the amount of money or income which is in excess of the net operating income. It…

Q: Consider each of the following independent situations: a. GYT Co. exchanges a machine that cost…

A: It is a figure that represents the combined net income and other comprehensive income of a…

Q: Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources),…

A: Cost allocation is the process wherein the costs are identified and allocated to the appropriate…

Q: Problem 1. Humility Company bought 25% of Meekness Company's outstanding ordinary share on January…

A: Consolidations:Consolidations refer to the financial strategy of acquiring the stock of a company to…

Q: Suspect Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The…

A: Journalizing is the process of recording all the relevant financial information in the form of…

Q: Complete the missing amounts in the following production report. Materials are added at the…

A: It is the report that gives information about the total units produced and total cost incurred…

Q: "We really need to get this new material-handling equipment in operation just after the new year…

A: SALES BUDGETSales Budget is the quantitative & Financial statement of Sales, Prepared prior to a…

Q: Beginning raw material Raw materials purchases Case 1 Case 2 Case 3 Case 4 $7,000 $16,000 $55,000…

A: Raw material:The input goods or the inventory that is used for the production of main product is…

Q: On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of…

A: The amount of tax that has not yet been paid but will be paid in the future is known as the deferred…

Q: Jemmott Corporation has two divisions: Western Division and Eastern Division. The following report…

A: Break even point:— It is the point of production where total cost is equal to total revenue. At this…

Q: A building acquired at the beginning of the year at a cost of $84,800 has an estimated residual…

A: The objective of the question is to calculate the double-declining-balance rate and the…

Q: West State Furniture (WSF) manufactures desks and desk chairs using two departments within a single…

A: Predetermined Overhead Rate :— It is the rate used to allocate manufacturing overhead cost to cost…

Q: Exercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2] Silver Company makes a product…

A: The company makes sales on cash as well as on account. The credit policy of every company is…

Q: Following are preacquisition financial balances for Padre Company and Sol Company as of December 31.…

A: Consolidated financial statements are a type of financial report that compiles the financial data…

Q: The accounting records of Nettle Distribution show the following assets and liabilities as of…

A: Statement of Shareholders Equity is a financial document a company issues as part of its balance…

Q: Mel and Susan Carter are working with an estate planner for disposition of their property during…

A: Income tax:The income tax refers to the amount that is paid by the taxpayer to the tax authority of…

Q: Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of…

A: A direct material purchase budget is used to estimate the units that should be purchased for…

Q: Crow Company purchased some of the machinery of Hare Incorporated, a bankrupt competitor, at a…

A: Liquidation is the process of bringing a business to an end and distributing its assets to…

Q: st and leave the corresponding number entry box blank. Enter account decreases and cash outflows as…

A: Financial statement:The financial statement is the statement or the record that is prepared by the…

Q: You have been given responsibility for overseeing a bank's small business loans division. The bank…

A: FIFO Method -The cost of goods sold for that specific period is affected since it is one of the…

Q: ! Required information [The following information applies to the questions displayed below.]…

A: FIFO METHOD:— Under this method, equivalent units are calculated by adding equivalent units in…

Q: The accountant for Baird's Dress Shop prepared the following cash budget. Baird's desires to…

A: A cash budget is an organization's projection of its expected inflows and expenditures of cash over…

Q: Military Sporting Goods is authorized to issue 5,000 preferred shares and 10,000 common shares.…

A: Stockholder's Equity includes the amount contributed by shareholders in the form of common stock,…

Q: 4. Carson-Smart-(marriedffiling-jointly) -is-paid- $1,000-every-two-weeks-plus-a taxable -…

A: Tax liability refers to the obligation of a taxpayer towards the government. This obligation…

Q: Current Attempt in Progress Crane Company signed a three-month, zero-interest-bearing note on…

A: When a note's issue price is lower than its face value, then the note is assumed to be issued at a…

Q: Oriole Inc.'s only temporary difference at the beginning and end of 2024 is caused by a $3.15…

A: Deferred tax liability:The deferred tax liability is the amount that is created when the company has…

Q: Consolidation rules are similar between countries. Comment

A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Q: [The following information applies to the questions displayed below.] Buckley, an individual, began…

A: Tax Liability -A person's or business's outstanding debt to the government is referred to as their…

Q: Pharoah Company sponsors a defined benefit plan for its 100 employees. On January 1, 2025, the…

A: Based on the provided information, we can calculate various figures related to Pharoah Company's…

Q: Sheniqua, a single taxpayer, had taxable income of $79,928. Her employer withheld $12,957 in federal…

A: Income tax liability -Income tax liability is the amount of tax that an individual or entity owes to…

Q: On February 13, GTS Co. paid $2,300 to repair the transmission on one of its delivery vans. In…

A: The objective of the question is to journalize the entries for the transmission repair and GPS…

Q: Waterway Company uses a perpetual inventory system and made a purchase of merchandise on credit from…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: The Pension Trust Fund maintained by the city of Marydell had the following transactions and events…

A: Journal entry contains the data which is significant to a single business transaction, including the…

Q: The entry to record the receipt of payment within the discount period on a sale of $1500 with terms…

A: accounts receivables for 1500Explanation:The discount amount on $1,500 would be:1,500 x 1% = 15…

Q: The following end-of-year account balance information is from the accounting records of June…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: Bennett Retailers had the following transactions in November and December: November 20 Sold 20 items…

A: Net sales : Net sales of a company or a business entity refers to the net amount that remains after…

Q: Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes…

A: Pension expense refers to the cost incurred by a company for providing pension benefits to its…

Q: The partnership of Garcia, Iglesias, and Kassabian was formed several years ago as a local tax…

A: Partnership -A partnership is a type of corporate structure in which two or more individuals…

Q: Big Blue University has a fiscal year that ends on June 30. The 2022 summer session of the…

A: Revenue is to be recognised as and when all performance obligations satisfied and there is…

Q: Under a perpetual inventory system, acquisition of merchandise for resale is debited to the…

A: Inventory accountExplanation:Under a perpetual inventory system, acquisition of merchandise for…

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.

Question

Which of the following is a benefit of selling on credit?
Select one:
Expenses are reduced by making sales to a wide range of customers.
Revenues are increased by making sales to a wider range of customers.
Cash is received sooner.
Some customers do not pay, creating an expense.
Clear my choice

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Explanation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

This module discusses discounts given out to customers based on payment terms, such as 2/10, n/30. : What would the credit terms 3/15, n/45 stand for? Explain why it is important for a company to keep track of how much money in discounts is given out? What account is used to track discounts? From a business owner's point of view, what are the advantages of allowing discounts? From a business owner's point of view, what are the disadvantages of allowing discounts?
Owner wants to purchase larger percentage of goods on credit. what advice would you give?
Which of the following would not result in a reduction of the amount invoiced to a customer when a credit sale is made? A. Quantity discount B. Cash-free discount C. Sales discountD. Two-for-one special
Which is correct with regards to the effects of restricting credit standards? a. Investment in accounts receivable will likely increase b. An increase in recognition of doubtful accounts expense will probably happen c. Positive impact on the net profit can be noted from decline in the quantity of goods sold d. Quantity of units sold will probably decrease and will result to a lower sales revenue
If you are the seller will you provide discount for customers? Why or why not? What type of discount will you provide for your customers? How will you account for this discount? Answer this by giving a sample problem including the debit and credit entries. If you are the buyer, will you get discounts for your suppliers? Why or why not?
Which of the following is correct with regards to cash discounts offering? Bad debts expense will probably decrease since customers more likely take the advantage of discounts It is used lengthen the cash conversion cycle without putting pressure the clients Investment in accounts receivable will likely grow since more customers will pay on a later date These are granted because customer acquires high quantity of products and goods
When a company has a generous credit policy, cash is tied up in receivables and the company must finance its expansion or the payment of its bills through increased borrowing. What label is given to this cost of selling on credit? Carrying cost Sales returns and allowances cost Bookkeeping cost Bad debit cost
Which of the following is correct with regards to cash discounts offering? a. It is used lengthen the cash conversion cycle without putting pressure the clients b. Investment in accounts receivable will likely grow since more customers will pay on a later date c. Bad debts expense will probably decrease since customers more likely take the advantage of discounts d. These are granted because customer acquires high quantity of products and goods
Select all the following statements that are true. Assume Gross Profit (Sales - COGS) for any product sales is positive. Group of answer choices When you sell goods on account, income and cash flow increase When you sell goods on account, income increases and cash flow decreases When you sell goods on account, income increases and cash flow is unaffected When you collect from customers that had previously purchased goods on account, income and cash flow increase When you collect from customers that had previously purchased goods on account, income increases and cash flow is unaffected When you collect from customers that had previously purchased goods on account, income is unaffected and cash flow increases
Which of the following is an advantage of using the net price method for recording cash discounts on credit sales? a. It eases communication with customers at balances. b. It properly reflects current per revenue. c. It simplifies recording of sales returns and allowances. d. It requires less recording keeping than the gross method.
Which of the following is a disadvantage of credit OR buying on using credit? * a Instant enjoyment b Emergencies c Convenience d Impulse buying Savings 2. From the list below, pick an advantage of using credit to complete a purchase: * a Overbuying b Instant enjoyment c Impulse buying d Financial Difficulties e Cost of credit
The goal of credit policy is to Maximise sales Minimise bad debt losses Minimise collection expenses Extend credit to the point where marginal profits equal marginal costs