Asked by lizzy rybarczyk on Jul 01, 2024
Which of the following will not be affected by a change in a firm's credit policy?
A) Gross profit.
B) Inventory.
C) Cash flows.
D) Current assets.
E) Net working capital.
Gross Profit
The difference between revenue and the cost of goods sold before accounting for certain other costs.
Net Working Capital
The difference between a company's current assets and current liabilities, indicating the short-term liquidity of a business.
Current Assets
Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business, whichever is longer.
- Comprehend how modifications in credit policy affect accounts receivable and the volume of sales.
- Understand the significance and techniques involved in receivables management, and its impact on cash flow.
Learning Objectives
- Comprehend how modifications in credit policy affect accounts receivable and the volume of sales.
- Understand the significance and techniques involved in receivables management, and its impact on cash flow.
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