In most situations this will be essential to grant credit to customers. It may be essential either due to competition or because of the custom of trade. Though, when we grant credit to customers this implies that we have to finance the cost of materials for the duration of that credit. Conversely, you are financing your customers' business to the extent of the credit granted. When the business is expanding, the volume of receivables will also expand. Please notice that the requirement for financing receivable is not to the full extent of the accounts receivables as sales. You are in reality financing only to the extent of cost of goods sold out of the receivables as sales in question.

Posted Date: 4/9/2013 1:35:58 AM | Location : United States

Ask an Expert

Related Discussions:- Receivables, Assignment Help, Ask Question on Receivables, Get Answer, Expert's Help, Receivables Discussions

Write discussion on Receivables
Your posts are moderated

Write your message here..

Related Questions

Transaction affect the cash flows statement, If a company trades in a build... If a company trades in a building towards a new building and does not recognize a gain or loss (because of code section 1031), will this transaction affect the cash flows statement

Profit and loss account, Both the parts, Profit and Loss Account and Tradin... Both the parts, Profit and Loss Account and Trading Account of last account are interdependent upon each other. Gross Profit or loss plays a very important role in the calculation

Material cost, distinguish between bin card and store ledgre distinguish between bin card and store ledgre

Implementation of re-apportionment of overheads, Implementation of Re-Appor... Implementation of Re-Apportionment of Overheads The re-apportionment of service department costs may be implemented in a number of methods. The Two extremes are as a) Wh

Prepare the appropriate entries for january 1, A corporation acquired a tru... A corporation acquired a truck on July 1, 2012, at a cost of $162,000. The truck has a six-year useful life and an estimated salvage value of $18,000. The straight-line method of d

Costsheet, preparation of costsheet preparation of costsheet

Accelerated cost recovery system - acrs, ACRS is a system of depreciation s... ACRS is a system of depreciation started by the Economic Recovery Tax Act of 1981. ACRS depreciation relies on recovery periods in spite of useful life. These periods were preset b

Methods of costing, METHODS OF COSTING : 1. Job costing :  Job costing ... METHODS OF COSTING : 1. Job costing :  Job costing is the essential costing technique appropriate to those industries somewhere the work consist of separate contracts, or batch

Contemporary Management accounting issue, Hello, I am writing a report ab... Hello, I am writing a report about a contemporary management accounting issue, and i can''t really seem to understand the guidelines well. What kind of topic can i use to write a

Determine the cost, Sanderson Company has the following production data for... Sanderson Company has the following production data for March: no beginning work in process, units started and completed 28,030, and ending work in process 3,890 units that are 100