It Is Not Uncommon to Read About Highly Successful Mutual

question 25

Essay

It is not uncommon to read about highly successful mutual fund managers that spend considerable amounts of time visiting the companies that they have placed their clients' funds with. What might be the motive(s) behind these visits?

---

Definitions:

Allowance Account

An account used in accounting to estimate and offset losses that may arise from receivables that are not likely to be collected.

Dishonored Note

A promissory note that has not been paid by the debtor at the time it is due.

Collection Efforts

Activities undertaken by a business or organization to pursue and recover funds owed by customers or clients.

Convert Receivables

The process of transforming accounts receivable (money owed to a company by its customers) into cash.