PA5 – Tutorial Test 7
Group 3!
Tiffany was just hired as the assistant treasurer of Key East Stores. The company is a
specialty chain store with nine retail stores concentrated in one metropolitan area. Among
other things, the payment of all invoices is centralized in one of the departments Tiffany
will manage. Her primary responsibility is to maintain the company’s high credit rating by
paying all bills when due and taking advantage of all cash discounts.!
Jay, the former assistant treasurer who has been promoted to treasurer, is training Tiffany
in her new duties. He instructs Tiffany that she is to continue the practice of preparing all
checks “net of discount” and dating the checks the last day of the discount period.
“But,” Jay continues, “we always hold the checks for at least 4 days beyond the
discount period before mailing them. That way, we get another 4 days of interest on our
money. Most of our creditors need our business and don’t complain. And, if they scream
