Which among the following options would help to improve the liquidity position of the business? a. Prompt payment of wages b. Reduction in the credit period allowed by the suppliers c. Prompt payment of day to day expenses d. Reduction in the credit period allowed to the customers

Which among the following options would help to improve the liquidity position of the business? a. Prompt payment of wages b. Reduction in the credit period allowed by the suppliers c. Prompt payment of day to day expenses d. Reduction in the credit period allowed to the customers

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 13MC: What information can best be elicited from a receivable ratio? A. company performance with current...

See similar textbooks

Related questions

Q: Sean's restaurant, you must deal with a variety of business transactions. Give an example of a…

A: Since we only answer up to 3 subparts, we will answer the first 3. Please resubmit the question and…

Q: The ratio that indicates the how well management operates the business Select one a .Liquidity…

A: The accounting ratios are calculated for measuring the financial strength of the Company.

Q: Identify if it will Increase, Decrease or No effect. 1.What will happen to the company’s liquidity…

A: 1.What will happen to the company’s liquidity when some of its products are sold from inventory?…

Q: You are required to prepare a reflection paper that incorporates your answers to the following…

A: Here are discussing the factors of the Accountant which are important to the business as well. The…

Q: short answer Some companies go out of business due to lack of cash flow. Even if they may have a…

A: Cash flow statement means the statement which shows the cash flow in or out of business enterprises…

Q: A company uses the direct write-off method to account for bad debts. What are the effects on the…

A: Direct write off method indicates that account receivable are directly charged and decreased against…

Q: What is the financial impact on a company when a customer returns a product for a refund?a. Sales…

A: Sales return: It can be defined as an event where customers return the goods previously purchased…

Q: A company's current ratio is 2.0. Which of the following actions would lower the current ratio,…

A: Current ratio is one of the liquidity ratio of the business, which shows ratio between current…

Q: When a company borrows money from the bank, what is the impact on the accounting equation? Group of…

A: Borrow money from Bank: The process of borrowing money from a bank and repaying it over time: The…

Q: What are the benefits of credit management brings on the economic aspect of a company?

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Most of the professional accountants support Historical cost accounting over the Current cost…

A: Historical cost accounting says that all assets and expenses in the business should be recorded at…

Q: According to concept of accounting, financial or business transaction is recorded: a ) when cash is…

A: in accounting is recording business transactions and arranging and preparing and storing bussiness…

Q: starting a business, is it okay to start with having debt during the early stages? What dictates the

A: Answer A company needs a financial capital to operate its business. For that many companies,…

Q: Which of the accounting controls ensure that a company's resources are used efficiently and…

A: Controls are the procedures which are designed and monitored by the management to ensure that the…

Q: What does a firm need to do to improve liquidity? O A. Stock up on inventory in order to never run…

A: Liquidity situation of the business means ability of the business to pay short term obligations from…

Q: Examine the business activity and decide for its classification from the choices below. Also,…

A: Cash flows from operating activities includes all cash inflows and cash outflows of the business…

Q: While you know that the balance sheet aging of receivables method is more accurate, it does require…

A: Aging method of receivables is one of the strong techniques which was used to determine the actual…

Q: Reflection paper for Accounting You are required to prepare a reflection paper that incorporates…

A: Here are discussing the factors of the Accountant which are important to the business as well. The…

Q: Explain “ACCRUAL BASIS” and “CASH BASIS” briefly with your own word by giving specific examples. If…

A: The accrual basis of accounting represents that the revenue and expenses would be recorded when it…

Q: Which business transaction will affect the quick ratio? a. Purchase a fixed asset with money…

A: The quick assets ratio is calculated as quick assets divided by current liabilities.

Q: A number of business transactions carried out by Smalling Manufacturing Company are as follows:a.…

Q: Profit maximization objective helps to: a. Increase the liquidity position of the business b. Reduce…

A: Two types of maximization Wealth maximization and profit maximization

Q: What does a low ratio in Creditors Turnover Ratio indicate? a. Company collects the money fast from…

A: Ratio analysis means where different ratio of various years of years companies has been compared and…

Q: When is revenue recognized by service provider? By a merchandiser? By a manufacturer? Differentiate…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Which of the following is related to the Time value principles of money and banking? a. Loan…

A: Time value principle of money states that money's worth decreases with time. Money's worth today is…

Q: or a retail business,which of the following is not part of its operating cycle? A.obtaining capital…

A: The operating cycle refers to the whole process cycle, which begins with the purchasing and ends…

Q: A bank loan approved for the business that has been paid into the bank account will have the…

A: Accounting Equation is the primary principle of accounting and also an important element in the…

Q: one of the following will decrease net working capital? Select one: a. A decrease in…

A: The gap between a firm's current assets and current liabilities, such as cash, accounts…

Q: A business that is profitable and liquid will have more accounts with credit balances than with…

A: Answer is false

Q: Refers to the inability of the business to meet its obligations as they mature on account of…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: A new manager of a retail company suggests that the company should prepare its Statement of Profit…

A: Accrual-based accounting records the transaction when event is happened. In this, transaction are…

Q: A number of business transactions carried out by Smalling Manufacturing Company are as follows:…

Q: Which of the following concepts states that a business will continue its operations for the…

A: Solution:- The following concepts states that a business will continue its operations for the…

Q: 39 - Which of the following transactions will cause a change in a company's equity ? a) Sale of…

A: Owner equity means the amount that belong to the owner of the business. Any profit will increase…

Q: Financial statement users assess a business liquidity and solvency to see whether a business is…

A: Solution Concept Liquidity The term liquidity means how quickly can the assets be…

Q: 1. Discuss what could possibly cause the problem of high returns of goods in a business

A: Note Dear student as per bartleby guideline we are required to answer the first question only .…

Q: Which of the following should show a profit in order for a financial institution to give a the…

A: When a financial institution has to provide a loan to the business, then it needs the financial…

Q: Which of the following analysis helps to understand the operational performance of the business…

A: The financial statements of the business includes the income statement and balance sheet of the…

Q: Which of the following entries is not one a firm would normally make? A) Debit salary expense,…

A: JOURNAL ENTRIES ARE THE RECORDING OF COMPANIES FINANCIAL RELATED TRANSACTIONS.

Question

Which among the following options would help to improve the liquidity position of the business?

Prompt payment of wages

Reduction in the credit period allowed by the suppliers

Prompt payment of day to day expenses

Reduction in the credit period allowed to the customers

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What information can best be elicited from a receivable ratio? A. company performance with current debt collection B. credit extension effect on cash sales C. likelihood of future customer bankruptcy filings D. an increase in future credit sales to current customers
a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?
a.What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses . Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?
Which of the following events will cause a company’s current ratio to decrease? a. The sale of inventory for credit (accounts receivable) b. Issuing stock for cash c. The sale of inventory for cash d. Paying off long-term debt with cash
Factors that reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency, profitability, and liquidity. O True False 00
What is the financial impact on a company when a customer returns a product for a refund?a. Sales revenue will decrease because sales revenue will be debited.b. Sales revenue will not be impacted because the company has already accrued forestimated refunds and returns.c. Sales revenue will increase because sales revenue will be credited.d. Returns expense will increase because returns expense will be debited.
Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long? a.The company may need to borrow to acquire operating cash. b.The company should expand operations with its excess cash. c.Cash flows from operations may be higher than expected for the company's sales. d.The company may offer trade discounts to lengthen the collection period.
explain how Value drivers are related to financial statement analysis and explain their behavior over time. Can a company reply on net income as a valid measure of cash needed to pay fixed charges? Explain you answer Explain why companies do not include principle payment requirement when calculating earnings to fixed charges ratio.
The ability of a business to pay its debts as they come due and to earn a reasonable net income is a. solvency and equity b. solvency and profitability c. solvency and leverage d. solvency and liquidity
Which of the following statements is most correct?(a) Working capital measures the company's ability to repay current liabilities using only current assets.(b) The day's sales outstanding (DSO) represents the average length of time that the firm must wait after making a sale before receiving cash.(c) The lower the debt ratio, the more the protection afforded creditors in the event of a liquidation.( d) All of the above.
What are lines of credit? From the viewpoint of a short-term creditor, why do lines of credit increase a company’s liquid-ity? How are the unused portions of these lines presented in financial statements?
Find the working captital, Current ration :1, debt to assets ratio, free cash flow, earning per share for both companies. And aslo which company has better liquidity? and which company has better solvency.