B2-M5 Working Capital Management 2 Flashcards
1
Q
what are the methods to convert AR to cash?
A
- collection agency
- factoring AR
- cash discounts
- electronic fund transfers: a method of payment, which electronically transfers funds between banks
2
Q
what is a trade discount?
A
trade discounts offer discounts on future merchandise purchases offered to trade customers
3
Q
what is average gross receivable balance?
A
it equals average daily sales x average collection period