Here are some important figures from the budget of Nashville Nougats, Inc., for the
second quarter of 2009:
The company predicts that 3 percent of its credit sales will never be collected, 36
percent of its sales will be collected in the month of sale, and the remaining 61 percent
will be collected in the following month. Credit purchases will be paid in the month
following the purchase.
In March 2009, credit sales were $302,400, and credit purchases were $224,640. The
April 1 cash balance was $403,200. What is the cash balance at the end of May?
Which one of the following will increase a firm's investment in accounts receivables?
A. a decrease in the number of days for which credit is granted
B. a decrease in credit sales
C. an increase in cash sales
D. a decrease in the average collection period
E. an increase in average daily credit sales
The ABC approach to inventory management is based on the concept that:
A. inventory should arrive just in time to be used.
B. the inventory period should be constant for all inventory items.