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Once credit has been extended it is vital to ensure that customers abide by agreed terms of trade. Regular checks on customer accounts for instance using an aged receivables analysis can direct attention to overdue accounts or those close to their credit limit.
Statements of account must be mailed to receivables on a regular basis in order to remind them of their outstanding debts. Late payers must be contacted by telephone to enquire after the reason for the delay in settling their accounts. A policy of charging interest on unpaid accounts might be considered in order to encourage prompt payment.
1. Think about the transactions listed below. a. A company obtains a $10,000 loan from a bank. b. A company purchases $15,000 of inventory from its suppliers. They paid $5,000 toda
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Describe the concept of full cost recovery with illustrative examples.
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