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Q. Credit Standards for Formulation of Optimum Credit Policy?
Credit Standards: - Credit standards are the essential criteria set for extension of credit to customers. Decision of credit to customers are engaged on the basis of their credit rating security provided by them average collection period of the firm as well as financial ratios. Principles are set for all these factors. A firm is able to control its credits by setting the credit standards accordingly. If credit standards are moderate more credit will be extended. Alternatively if standards are tight less credit will be extended. Issue for which standards are set can be classified keen on two broad categories namely:
a) Qualitative Factors: - Qualitative factors such as willingness as well as ability of the customers to pay for purchase public image of the customer and other social factor are included.
b) Quantitative Factors: - Quantitative factors such like average collection period and financial ratios.
Is the net income of a year the money the company made that particular year or is it a number whose significance is quite doubtful? The net income of a year is not money that a
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Q. Define Double-Entry Bookkeeping? Double-Entry Bookkeeping - Method of recording financial transactions in that every transaction is entered in two or more accounts and inclu
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Crown Co. is expecting to receive 100,000 British pounds in one year. Crown expects the spot rate of British pound to be $1.49 in a year, so it decides to avoid exchange rate risk
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