Which of These Is Most Likely the Fastest Method of Collecting

question 35

Multiple Choice

Which of these is most likely the fastest method of collecting cash?

• A)Requiring customers to submit all payments to a lockbox
• B)Requiring customers to submit all payments to the home office
• C)Initiating a financial electronic data interchange at the time of sale
• D)Offering customers credit terms of 1/5, net 15
• E)Eliminating all disbursement float

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Definitions:

Entity Method

A consolidation approach where investments are recorded at the purchase cost, adjusted for the parent company's share in the subsidiary's post-acquisition profits or losses.

Gross Margin

A company's revenue minus its cost of goods sold, divided by revenue, expressed as a percentage, indicating the percentage of revenue that exceeds the cost of goods sold.

Inventory

Inventory comprises the goods and materials a business holds for the purpose of resale or production.

Consolidated Net Income

The total earnings of a corporation, after taxes and expenses, including its subsidiaries, presented in a single financial statement.