B2-M5 Working Capital Management 2 Flashcards

1
Q

what are the methods to convert AR to cash?

A
  1. collection agency
  2. factoring AR
  3. cash discounts
  4. electronic fund transfers: a method of payment, which electronically transfers funds between banks
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2
Q

what is a trade discount?

A

trade discounts offer discounts on future merchandise purchases offered to trade customers

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3
Q

what is average gross receivable balance?

A

it equals average daily sales x average collection period

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