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!
Dangers of over-reliance on trade credit
In effect for the reason that trade credit represents temporary borrowing from suppliers until invoices are paid it becomes an important method of financing the firm's investment in current assets. Firms perhaps tempted to view trade payables as a cheap source of finance especially as in the UK at least it is currently interest-free. Having a receivables' collection period smaller than the trade collection period may be taken as a sign of efficient working capital management.
Nevertheless trade credit is not free. First by impediment payment of accounts due the company may be passing up valuable discounts thus effectively increasing the cost of goods sold. Second extreme delay in the settlement of invoices can undermine the existence of the business in a number of ways. Existing suppliers perhaps unwilling to extend more credit until existing accounts are settled they may begin to attach a lower priority to future orders placed they may raise prices in the future or simply not supply at all. Additionally if the firm acquires a reputation among the business community as a bad payer its relationships with other suppliers may be soured.
Dillings Ltd is a wholesaler and distributor of catering of office equipment. The following list of balances was extracted from its books at 31 March 2004: The following ad
what is the treatment of increase in allowance receivable.
how to calculate the value of ordinary share
Completely and incompletely constituted trusts In all cases the trust must be completely constituted. A trust is completely constituted when the trust property has been vested
On December 31, 2014, Santana Company has $7,194,600 of short-term debt in the form of notes payable to Golden State Bank due in 2015. On January 28, 2015, Santana enters into a re
ACQUISITION OF A SUBSIDIARY COMPANY DURING THE YEAR When the holding company acquires a subsidiary company portray during the financial period, and then the approach to preparing
Content of accounts Periodical accounts should normally consist of: 1. Balance sheet of the whole trust; 2. Capital account; 3. Income account
Indicate how each of the following transactions affects the accounting equation. a.Purchase of supplies on account. b.Payment of wages. c.Cash sale of goods for more than their cos
why good judgement is important when making budgeting decisions
Calculat capital expenditure, How to define Capital expenditure This is kind of expenditure on fixed assets like as plant or equipment, the cost of which is spread over several
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