Question

42.

A collections procedure manual is useful because:

		It defines the credit terms.
		It keeps the credit department busy with updates.
		It simplifies training.
		All of the above.

43.

An important component in mercantile credit applications is:

		The name of the legal entity as well as the trade style.
		The payment terms
		Restrictions on returns and restocking fees.
		All of the above.

44.

The financial ratio which best represents “Character” is:

		Inventory holding period
		Average Payable period
		Debt to total assets
		Interest Coverage

Answer 1

42. Collection precedure manual purpose is to provide a company with basic collection policies and skills and procedures for collections.Getting the cash inflow is very important for a company to be in successful position as well as business goal of company. so company need to follow several guide lines to ensure timely collections. such procedures include:-

1. Defining the team responsilbilites and their deadlines to acheive target collections

2. defining credit terms and updation of credit terms within time

3.Provides training to the team to pace the upcoming challanges

4. Purpose and scope along with detailed principles

so answer to the above problem is all of the above.

43. The main component in mercantile credit application is payment terms

44.As per my view the ratio that best represent character is Interest Coverage