Inflow of cash from sales

Reference no: EM13954189

Explain various techniques that companies use to accelerate the inflow of cash from sales.

• To be competitive, companies must make sales on credit to customers.
• One way to avoid bad debts associated with extending credit directly to the customer and to accelerate cash collections from sales is to accept credit cards for payment of goods and services.

Explain the accounting for and disclosure of various types of investments that companies make.

• Typically, excess cash expected to last for short periods of time is invested in highly liquid financial instruments such as CDs.
• Sometimes cash is invested in securities of other corporations:
• Equity securities-securities issued by corporations as a form of ownership in the business.
• Debt securities-securities issued by corporations as a form of borrowing.
• At times, a company may want to purchase a relatively large portion of another firm's stock to acquire influence over that firm.

Reference no: EM13954189

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