Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
So as to makes sure that the receivables are collected in occupied and on due date by the customers, prior information of their credit worthiness must be obtainable. This information can be gathered by a variety of sources that we are going to discuss shortly. One significant thing that needs to be remembered while gathering credit information is as collecting credit information includes cost, thus the cost of collecting information must be less than the potential profitability of credit sales. The other factor that should be borne in mind is as collecting credit information may occupy a lengthy period of time, on account of such credit granting decision must not be delayed for long. Depending on these two factors any or a combination of the subsequent process may be utilized to collect the information.
- Financial Statements: Profit and loss account and Balance sheet of customers firm offer valuable insight upon the operating financial soundness, sources of funds, application of creditors and funds and debtors. The subsequent ratio computed from financial statements seems particularly useful in this context: acid test ratio and Current ratio, debt equity ratio, Earning before Interest and Taxes (EBIT) to total assets ratio and return on equity.
- Bank References: A customer's bank a/c is also a valuable source of information about the credit worthiness of the customer. A thorough analysis of bank transactions would reveal the financial behaviour and characteristics of the customer. Bank references can be acquired either directly or through requesting the customer to instruct his bank to give similar.
- Trade references: The seller can ask the prospective customer to offer trade references. Trade references are generally of those firms along with whom the customer is having current dealings.
- Other Sources: A firm can also acquire information regarding the prospective customer from credit rating agencies as CRISIL, CARE and ICRA and trade and industry associations.
Imposed Budgets In this approach to budgeting, top management prepares a budget with little or no help from operating personnel, which is then obligatory upon the employees who
Determine the Scope and areas of cost reduction Scope and areas of cost reduction the scope of cost reduction is so wide that it is not practicable to develop fully the areas i
what is the topic about? what are the practical implications? what are the practical criticisms?
How do you compare two companies operating leverage? Must the sales volume be set the same or the net operating income?
Parameter prediction error: This is another aspect of faulty planning. As Hongren says, ‘planning decisions are based on predictions of future costs, future selling price, fut
Management Accounting 1) Which is concerned with provision of information to people within the organization to help them make better decisions? Management accounting is concer
Problem Marginal costing plays a major role in making certain decisions. It provides information to management regarding the behaviour of costs and the incidence of such costs
#quesXERCISE 3-15 Departmental Overhead Rates [LO1, LO2, LO3] Diewold Company has two departments, Milling and Assembly. The company uses a job-order costing system and computes a
Private sector companies have multiple stakeholders who are likely to have divergent interests.( five stakeholder groups and discuss their financial and other objectives).
Features of product life cycle costing Product life cycle costing is important due to the following features: 1) product life cycle costing involves tracing of costs and re
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd