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Exact management of receivables acquires a suitable collection policy that outlines the collection procedures. Collection policy consider as the procedure adopted through a firm to collect payments due on past accounts. The fundamental objective of the collection policy is to minimize bad debt losses and average collection period. A strict collection policy can influence the goodwill and can adversely influence potential future sales while on the other hand a lenient collection policy can lead to risen average collection period and raised bad debt losses. An optimum collection policy must intend towards decreasing collection expenditure.
Objectives of ratio analysis 1) Measuring the profitability: we can measure the profitability of the business by calculation gross profit net profit expenses ratio and other.
After going through this section, you must be capable to: Know the concept and characteristics of working capital; Identify with the difference among net working capital
JOINT PRODUCT DECISIONS When a manufacturing Company carries out a process operation in which 2 or more joint products are made from a common process a number of decision troub
REGRESSION ANALYSIS A regression equation identifies an estimated relationship between a dependent variable (the cost) and one or more independent variables (the cost driver).
Advantages of Transfer Pricing (a) Transfer pricing is similar to cost apportionment and allocation in that values of one department are passed to another. For cost apportionme
Explain Current budgets Current budgets: the period of current begets is generally of months and weeks. These budget relate to the current activities of the business. According
Explain Operating budgets These budgets relate to the dissimilar activities or operation of a firm the number of such budgets depends upon the size and nature of business. The
Describe the impact of different types of standards on motivations, and specifically, the likely effect on motivation of adopting the labor standard recommended for Geeta & Company
solution.
The Rohr Company’s old equipment for making subassemblies is worn out. The company is considering two courses of action: (a) Completely replacing the old equipment with new equipme
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