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21.
Which one of the following time periods is included in the accounts
receivable period but not in the cash collection period?
22.
Which one of the following statements is correct if you purchase an item
with credit terms of 1/5, net 15?
23.
You are doing some comparison shopping. Five stores offer the product you
want at basically the same price. Which one of the following stores offers
the best credit terms if you plan on taking the discount?
24.
You are doing some comparison shopping. Five stores offer the product you
want at basically the same price. Which one of the following stores offers
the best credit terms if you plan to forego the discount?
25.
Which one of the following statements is correct?
26.
Which two of the following are the key considerations for a seller who is
establishing the length of the credit period being offered to a customer?
I. seller's operating cycle
II. customer's operating cycle
III. seller's inventory period
IV. customer's inventory period
27.
Which one of the following factors tends to favor longer credit periods?
28.
Which one of the following statements is correct in regards to credit
periods?
29.
A cash discount of 2/5, net 30:
30.
Under credit terms of 1/5, net 15, customers should:
31.
A 2/10, net 30 credit policy:
32.
The Green Hornet offers a trade discount with terms of 2/5, EOM. Assume
you purchase an item on credit from The Green Hornet on Monday,
November 3. What is the invoice date for this purchase?
33.
Which one of the following credit instruments is commonly used in
international commerce?
34.
A conditional sales contract:
35.
Which of the following statements correctly reflect the effects of granting
credit to customers?
I. Total revenues may increase if both the quantity sold and the price per
unit increase when credit is granted.
II. A firm's cash cycle generally increases if credit is granted, all else equal.
III. Both the cost of default and the cost of discounts must be considered
before granting credit.
IV. A firm may have to increase its long-term borrowing if it decides to grant
credit to its customers.
36.
You are considering switching from an all cash credit policy to a net 30
credit policy. You do not expect the switch to affect either your sales
quantity or your sales price. Ignoring interest and assuming that every
month has 30 days, your net present value of the switch will be equal to:
37.
The optimal amount of credit equates the incremental costs of carrying the
increase in accounts receivable to the incremental:
38.
When credit policy is at the optimal point, the:
39.
If you extend credit for a one-time sale to a new customer you risk an
amount equal to:
40.
Which one of the following statements is correct?
