Stop-Payment Orders

question 73

Multiple Choice

Stop-payment orders:

• A) must be in writing in order to be effective
• B) may be oral,but are effective only for 14 days unless confirmed in writing within the 14-day period,in which case they will be effective for 6 months
• C) are effective as long as the account remains open if the order is in writing
• D) are effective for 6 months whether oral or in writing

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Definitions:

Accounts Receivable Approach

The accounts receivable approach is a method used in financial analysis to estimate the impact of credit sales and receivables on a company's cash flow and profitability.

Net Present Value

Net present value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Cost Of Switching

The cost of switching refers to the expenses and inconveniences a customer or company faces when changing products, services, or suppliers, including termination fees, setup costs, and time.

Incremental Cash Inflow

Additional cash earnings a company receives from undertaking certain actions, such as launching a new product or project.