Norquay Inc

question 43

Multiple Choice

Norquay Inc.manufactures computers.The company tries to minimize the amount of inventory it must carry and therefore only purchases required components after a customer order is received.The computers are usually completed within two days of the customer order and then shipped to the customer on the fourth day following the purchase of materials.Supplier's terms dictate that all purchases must be paid for within 30 days.Norquay offers a deferred financing plan to all of its customers that allow them a 60-day period of no payments or interest.Most of the customers pay their entire balance on the 60th day following delivery of the computer.What is Norquay's payable deferral period?

• A)2 days
• B)4 days
• C)30 days
• D)60 days

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Definitions:

Drawee

The person or entity upon whom a check, draft, or bill of exchange is drawn and who is expected to pay it.

Payee

The person or entity to whom a payment is to be made or who receives the payment.

Negotiable Instruments

Financial documents, like checks or promissory notes, that guarantee payment of a specific amount of money to the bearer under certain conditions.

UCC

Stands for Uniform Commercial Code, which is a comprehensive set of laws governing all commercial transactions in the United States.