If You Are Considering Trading in a Used Car for Your

question 31

Multiple Choice

If you are considering trading in a used car for your new one, it is best to

• A)tell the dealer right away so he can figure your trade-in credit against the purchase price of your new car.
• B)not trade the car in, but rather sell it yourself over the internet.
• C)negotiate the price of the new car before advising the dealer you have a trade-in.
• D)not be too concerned about the value given, since dealers are required to give you at least Blue Book value.

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Definitions:

Total Current Assets

The value of all assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Journalize Transactions

The process of recording financial transactions in the journal as part of the accounting cycle.

Accounts Receivable Turnover

A financial ratio that measures how many times a company can turn its accounts receivable into cash during a period.

Days' Sales in Receivables

A financial metric that calculates the average number of days it takes a company to collect payment after a sale has been made.