Credit investigation, Managerial Accounting

Assignment Help:

Once the credit information is accumulated the subsequent step is to analyze the gathered information and isolate those matters that may need further investigation. The factors which affect the extent and nature of credit investigation are given as:

  • Category of customer, whether new or existing
  • The customer's background, business line and the related trade risks
  • The nature of products-perishable or seasonal
  • The size of the customer's demand and expected additional volume of business with him or her
  • Company's credit practices and policies
  • Capacity: Capacity refers to the capability of the buyer to pay the due on time and is generally judged through the past turnover and the repayment behaviour
  • Character: Character considers as the willingness of the buyer to pay. The character of the buyer is usually judged by his or her past record of payments and default history if any.
  • Collateral: it implies that the security against the credit granted to customers. A buyer willing to furnish sufficient collateral is judged as more creditworthy as compared to buyers who are not capable to furnish any collateral.
  • Conditions: this is here referring to the sensitivity of the buyer to common economic environment.

Related Discussions:- Credit investigation

How can improvement in product design - cost reduction, Improvement in prod...

Improvement in product design may result in cost reduction illustrated below: 1) Material cost : change in design of the product may result in saving in material cost. Economi

Decision making, Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a ...

Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a contract with a potential customer in Jamaica. Before the negotiations started the Jamaican company agreed to pay $10,000

Coca Cola Balance Sheet, Required: 1. Using the information provided prepa...

Required: 1. Using the information provided prepare a Balance Sheet. Separate the current assets from non-current assets and provide a total for each. Also separate the current li

Business application, Conceptual understanding: defining in identifying rel...

Conceptual understanding: defining in identifying relevant information Business application - Dave burgers is in the fast food restaurant business. One component of it's market

Costing and Budgetory Control, Given budgeted figures and actual, then anal...

Given budgeted figures and actual, then analyses each fixed cost into its components

Cost, Stellar Packaging Products and its primary customer, Estrella Coffee,...

Stellar Packaging Products and its primary customer, Estrella Coffee, are deciding on appropriate costing systems for their operations. Stellar Packaging Products’ manufacturing is

Limitations of abc analysis, LIMITATIONS OF ABC ANALYSIS However ABC an...

LIMITATIONS OF ABC ANALYSIS However ABC analysis is a basic tool for exercising selective control over many inventory items, it does not, in its current form, allow precise con

Management accounting , Management Accounting 1) Which is concerned wi...

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

Full service non recourse, Full Service Non Recourse: in this method the b...

Full Service Non Recourse: in this method the book debts are purchased through the factor assuming 100 percent credit risk. In case of default through the debtor the whole risk is

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd