In Company XYZ, Assume That Level Production Happens Throughout the Year

question 52

Multiple Choice

In company XYZ, assume that level production happens throughout the year and that receivables are collected in two equal installments over a two-month period subsequent to the sales period. If XYZ wants to develop a cash budget, which of the following steps is required?

• A) Calculate ending accounts receivable balances.
• B) Calculate cost of goods sold.
• C) Estimate monthly net cash flow and bank borrowing or repayments.
• D) Calculate ending inventory.

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Definitions:

Compliance

The act of conforming to a request or demand, often from a figure of authority.

Compliance Tactics

Strategies used to persuade or influence others to agree with or obey a request or command.

Free Samples

Small quantities of a product given at no charge, allowing consumers to try before making a purchase decision.

Reciprocity Norm

A social norm suggesting that people should return the help they have received from others, creating a cycle of mutual assistance.