The Following Information Is Provided for a Company That Manufactures

question 37

Essay

The following information is provided for a company that manufactures bicycles.The factory foreman determines when orders for materials are necessary.The orders are sent to the purchasing department that places orders with the vendors recommended by the factory foreman.When the materials are received,they are immediately delivered to a central storeroom.When invoices are received for the items purchased,they are sent to the accounting department for payment.The accounting department compares the invoices with purchase orders.If the two documents are in agreement,the invoice is approved for payment.The accounting department prepares checks that are signed by the company treasurer.

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Definitions:

Lock Boxes

A cash management service offered by banks involving the collection of payments from a corporation's customers, aiming to reduce the time it takes for companies to receive payments.

Mail Float

The time between when a payment is mailed and when it is received and processed.

Warehousing

The process of storing goods in a large building until they are sold or distributed.

Source of Financing

The means through which funds are provided to businesses for operating capital or growth, including loans, investment, or earnings.