The following is a list of activities that companies perform in relation to their receivables.Match each of the activities listed below with a purpose of the activity listed below.1. Selling receivables to a factor. select a purpose Determine to whom to extend creditEvaluate the liquidity of receivablesMonitor collectionsAccelerate cash receipts from receivable when necessaryEstablish a payment period2. Reviewing company ratings in The Dun and Bradstreet Reference Book of American Business. select a purpose Establish a payment periodEvaluate the liquidity of receivablesMonitor collectionsDetermine to whom to extend creditAccelerate cash receipts from receivable when necessary3. Collecting information on competitors’ payment period policies. select a purpose Establish a payment periodDetermine to whom to extend creditEvaluate the liquidity of receivablesAccelerate cash receipts from receivable when necessaryMonitor collections4. Preparing monthly accounts receivable aging schedule and investigating problem accounts. select a purpose Accelerate cash receipts from receivable when necessaryMonitor collectionsDetermine to whom to extend creditEvaluate the liquidity of receivablesEstablish a payment period5. Calculating the accounts receivable turnover and average collection period.

An organisation whose motive is to procure income through selling goods & services to the…

Answered: Match each of the activities listed…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 15QE

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The following is a list of activities that companies perform in relation to their receivables.

Match each of the activities listed below with a purpose of the activity listed below.

1.	Selling receivables to a factor.	select a purpose Determine to whom to extend creditEvaluate the liquidity of receivablesMonitor collectionsAccelerate cash receipts from receivable when necessaryEstablish a payment period
2.	Reviewing company ratings in The Dun and Bradstreet Reference Book of American Business.	select a purpose Establish a payment periodEvaluate the liquidity of receivablesMonitor collectionsDetermine to whom to extend creditAccelerate cash receipts from receivable when necessary
3.	Collecting information on competitors’ payment period policies.	select a purpose Establish a payment periodDetermine to whom to extend creditEvaluate the liquidity of receivablesAccelerate cash receipts from receivable when necessaryMonitor collections
4.	Preparing monthly accounts receivable aging schedule and investigating problem accounts.	select a purpose Accelerate cash receipts from receivable when necessaryMonitor collectionsDetermine to whom to extend creditEvaluate the liquidity of receivablesEstablish a payment period
5.	Calculating the accounts receivable turnover and average collection period.

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