Which of the following is TRUE with regards to establishing credit limits for customers? O It is important to independently maintain customer accounts and credit limits. O The ability to add a new customer and change or assign a credit limit should be devolved to staff in the sales area. O The Chief Financial Officer should overview all customer credit limits. O Credit limits should be established based on desired sales targets.
Q: Overall, do you believe that extending credit to customers is a good business practice? Why or why…
A: Credit policy: It is the policy of the business to provide goods and services on credit to its…
Q: Assume you are considering an entity’s internal controls over credit sales and cash collection.…
A: "Since you have asked multiple question we will solve the first question for you. If you want any…
Q: Which one of the following statements best describes the purpose of a goods despatched note? A It is…
A: The goods dispatch note is prepared by seller, so as to keep the record of goods being dispatched.
Q: What is the billing and collection process flow? Group of answer choices 1. If the customer is a new…
A: Billing process flow involves many steps like setting up the product code then setting up customer…
Q: 1. SEGREGATION OF FUNCTIONSWhich, if any, of the following situations representsimproper segregation…
A: Segregation Function: Segregation of function refers to an important physical control. This…
Q: A credit memorandum is prepared when * an employee does a good job goods are sold on credit O goods…
A: Solution: A credit memorandum is prepared when "goods that were sold on credit are returned".
Q: What internal control procedure ( s ) would provide protection against the following threats ? An…
A: Internal control procedures are employed for ensuring the proper accounting and auditing controls…
Q: Which of the following is not a user of internal accountinginformation?a. Store manager.b. Chief…
A: Accounting information: It can be defined as all the data or information that relates to the…
Q: The control procedure “credit sales approved by credit department” is directed toward which…
A: Existence assertion relates to asserting if the transaction has actually taken place. Completeness…
Q: Companies like to use statistical scoring systems, such as the Z score, to assess a customer's…
A: z score is used to determine the reliability in predicting the bankruptcy one or two years before…
Q: Which one of the following best defines the term credit scoring? A. Categorizing customers…
A: The statistical tool used to analyze the performance by lenders and financial institutions so as to…
Q: As a consultant explain to your staff how the absence of Trial Balance will affect the preparation…
A: Comments; Multiple questions asked Trial balance - It is a statement that shows the particular…
Q: Distinguish between the sales order, billing, and AR departments. Why can’t the sales order or AR…
A: The sales order, billing and AR department are responsible for placing the orders from the…
Q: 1. What would a credit manager do if a sales order received caused a customer to exceed its credit…
A: The credit manager should disapprove the sales order as it will increase the collection period…
Q: (A) Explain the fundamental purpose of the sales and collection process. (B) Differentiate between a…
A: The process of sales and collection is officially known as Sales and Collection Cycle and RRR…
Q: Which statement about Revenue Cycle is correct?
A: The revenue cycle begins with providing a product or service and ends when the invoice is paid in…
Q: separate account for sales returns and allowances useful to management? If you owned a…
A:
Q: When will a credit check approval most likely require specific authorization by the credit…
A: Answer: Option b.
Q: What would a credit manager do if a sales order received caused a customer to exceed its credit…
A: When orders are received from new customers, the system automatically accesses the credit rating…
Q: plain why it is important for a company to keep track of how much money in discounts is given out?…
A: . Percent of cash discount since 3/15, n/45 is the credit term between the seller and buyer which…
Q: of the credit policy to (a) the credit department and (b) customers.
A: Credit standards are the set of standards that a company, bank or other financial institution used…
Q: As orders are received from customers, a personnel in the sales department prepares a sales order…
A: What area in the transaction cycle is deemed a control weakness instead of strength? a. The approval…
Q: Which of the following will decrease the investment in branch's account in the home office account…
A: Investment in branch account is an asset for the home office.
Q: A credit manager who is concerned about a client's viability might take all of the following steps…
A: Credit manager works for the management of credit on client behalf. Normally responsible for credit…
Q: Which of the following would not be a control in a sales system? a. Agreeing details from the sales…
A:
Q: What internal controls would you implement to help maintain control of your credit sales and…
A:
Q: Which of the following is NOT a benefit of providing credit to customers?
A: Providing credit to customers means allowing certain time period to customer for making payment…
Q: Which of the following are examples of preventive controls? Select all that apply. O account coding…
A: Preventive controls are the controls placed in the system prior to the occurrence of any threat to…
Q: Differentiate between a remittance advice and a customer invoice within the sales process of an…
A: Accounting exchanges are those exchanges that legitimately influence the financial statements of a…
Q: What is the reason for ensuring that every copy of a vendor's invoice has a receiving report? O To…
A: Audit is the process of checking and examining books of account of the business, so that it can be…
Q: If the branch receives credit memo from the home office, the branch shall record it in its separate…
A: Branch accounting is defined as an a accounting system in which separate accounts are kept for each…
Q: Using a bpmn modelling tool, model the control flow of a business process for modelling credit risk?…
A: The Business Process Modeling Notation (BPMN) is an open standard notation for graphical flowcharts…
Q: Identify which department has stewardship over the following journals, ledgers, and files. a.…
A:
Q: A credit bureau, AKA credit agencies, are companies that collect credit information about…
A: A credit bureau can be defined as a company that gathers and researches information about…
Q: Suppose that you are the credit manager for a small clothing manufacturer. You main responsibility…
A: A credit manager is an individual who is responsible for managing credits of the concerned company…
Q: Who needs credit and collection management and why do they need ccm?
A: when the revenue cycle management for the credit and collection management is done by the healthcare…
Q: Which of the following is not an internal user? a. Creditor b. Department manager c. Controller d.…
A: Internal users: These include all the people within the organization who make use of the company's…
Q: how would you check the information provided by an applicant for credit at a department store? by a…
A: WHAT IS CREDIT ? Labor and products can be paid for forthright or on conveyance, or are provided…
Q: Discuss the trade-off in choosing to update the customer credit, should the sales clerk ever be…
A: The credit limit of each customer is decided by the credit manager based on the customer's credit…
Q: Explain how exception reporting would be invaluable to the manager of a credit department.
A:
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- Question: The credit worthiness of a customer is normally checked by the organization's Credit Control Department, before any credit sales is approved. reqiured: state why this process is important?Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company’s . Consider the case of Universal Exports Inc.: Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 1/10, net 30. If a customer bought $150,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $157,500 $148,500 $120,000 $127,500 If the customer paid off the account after 15 days, Universal…Discuss the trade-off in choosing to update the customer credit, should the sales clerk ever be authorized to override the decision? If so when?
- Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. A. How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company’s . Consider the case of Sombra Corp.: Sombra Corp.’s CFO has decided to take a closer look at the company’s credit policy. Sombra Corp. has annual sales of $384.4 million, and it currently has an accounts receivable balance of $45.9 million. The first step in analyzing the firm’s credit policy is to determine its days sales outstanding (DSO). B. Based on this information, Sombra Corp.’s DSO is . (Note: Use 365 days as the length of a year in all calculations.) C. The average DSO for Sombra Corp.’s…Effective credit management involves establishing credit standards for extending credit to customers, determining the company's credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company's collection policy Consider the case of Mammoth Pictures Inc.: Mammoth Pictures Inc.'s CFO has decided to take a closer look at the company's credit policy. Mammoth Pictures Inc. has annual sales of $396.3 million, and it currently has an accounts receivable balance of $47.6 million. The first step in analyzing the firm's credit policy is to determine its days sales outstanding (DSO). Based on this information, Mammoth Pictures Inc.'s DSO is The average DSO for Mammoth Pictures Inc.'s industry is 51.2 days. Assuming that its sales…Effective credit management involves establishing credit standards for extending credit to customers, determining the company's credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The conditions of the credit sale, including cash discounts and due dates, are indicated by the company's credit standards Consider the case of Sombra Corp.: Sombra Corp. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Sombra Corp. sells to its customers on credit terms of 1/10, net 30. If a customer bought $100,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Sombra Corp. get from the customer? $90,000 O $105,000 $82,500 $99,000 If the customer paid off the account after 15 days, Sombra Corp. would receive Approximately 35% of Sombra Corp.'s customers take advantage of…
- Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company’s . Consider the case of Three Waters Co.: Three Waters Co.’s CFO has decided to take a closer look at the company’s credit policy. Three Waters Co. has annual sales of $384.4 million, and it currently has an accounts receivable balance of $45.4 million. The first step in analyzing the firm’s credit policy is to determine its days sales outstanding (DSO). Based on this information, Three Waters Co.’s DSO is . (Note: Use 365 days as the length of a year in all calculations.) The average DSO for Three…Which one of the following best defines the term credit scoring? A. Categorizing customers into groups depending on the length of time it takes each customer to pay for purchases B. Compiling a list of accounts receivable segregated by the length of time each receivable has been outstanding C. Evaluating the opportunity costs of a credit policy D. Process of quantifying the probability of default when granting credit to customers E. Tracking of both the number and the size of customer orders over a period of timeThere are four reports used by the credit and collections department those are credit level report, receivable aging report, bad debt report, and customer profitability report. Explain the importance of those reports in the effective performance of the credit and/or collection. Discuss the benefits of the credit policy to (a) the credit department and (b) customers.
- When will a credit check approval most likely require specific authorization by the credit department? a. when verifying that the current transaction does not exceed the customer’s credit limit b. when verifying that the current transaction is with a valid customer c. when a valid customer places a materially large order d. when a valid customer returns goodsWhat would a credit manager do if a sales order received caused a customer to exceed its credit limit?Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s terms of credit, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The conditions of the credit sale, including cash discounts and due dates, are indicated by the company’s (______) . Consider the case of Newtown Co.: Newtown Co.’s CFO has decided to take a closer look at the company’s credit policy. Newtown Co. has annual sales of $402.8 million, and it currently has an accounts receivable balance of $47.6 million. The first step in analyzing the firm’s credit policy is to determine its days sales outstanding (DSO). Based on this information, Newtown Co.’s DSO is (_____) . (Note: Use 365 days as the length of a year in all calculations. Do not round intermediate calculations. Round your answer to one…