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After going through this section, you must be capable to:
Know the need for establishing sound credit policy;
Identify the different credit policy variables;
Know the credit evaluation process;
Identify the techniques of monitoring receivables and
Identify the notion of factoring.
Cost comprise impact Some of the policy choices which tend to have the maximum impact on cost comprise: Product performance, configuration, and characteristics Mix and
Management Accounting Influence (A) Transfer pricing and performance measurement relies upon the judgment of the management accountant to make a suitable choice of approach
Financial decisions are depends on specific considerations the major being the cash flows, liquidity and cost. Short-term working capital decisions or financial decisions are diffe
Account analysis (Inspection of accounts) method: This method requires that departmental managers and the accountant inspect each item of expenditure within the accounts for s
A firm requires continuously monitoring and controlling its receivables to make sure that the dues are paid on the due date and no dues stay outstanding for a long period of time.
1. Common-size analysis of company''s income statement, Balance sheet 2. Horizontal analysis of company''s income and balance sheet : for the last two years for both 3.perform rati
Absorption cost Absorption, or full cost systems, transfer the full cost of the supplying department to the receiving department. Where a profit is to be allowed to the supplyi
Limitation of break even charts Despite many advantages a break even chart suffers from the following limitations: 1) A break even chart is based upon a number of assumption
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Economies or Diseconomies of Scale The costs of a value activity are often subject to economies or diseconomies of scale. Economies of scale occur from the capability to perfo
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