Credit and Inventory Management

Blackwell Brothers sells men's suits. The store offers a 1 percent discount if payment is received within 10 days. Otherwise, payment is due within 30 days. This credit offering is referred to as the:

• collection policy

• . payables policy.

• collection float.

• terms of sale

Jillian was recently hired by a major retail store. Her job is to determine the probability that individual customers will fail to pay for their charge sales. Jillian's job best relates to which one of the following?

• collection float.

• . payables policy.

• collection policy

• credit analysis

Town Hardware sells goods on credit with payment due 30 days after purchase. If payment is not received by the 30th day, the store mails a friendly reminder to the customer. If payment is not received by the 45th day, the store calls the customer and requests payment and also stops offering credit to that customer. These procedures are referred to as the store's:

• collection policy

• payables policy.

• disbursements policy.

• customer service policy.

Phil's Print Shop grants its customers the right to pay for their print jobs within 30 days of the date of service. This 30-day period is referred to as the

• credit period.

• disbursement period.

• transactions period.

• transactions period.

Scott purchased a shovel, a rake, and a wheelbarrow from The Local Hardware Store yesterday. Today, the store issued a bill for these items and mailed it to Scott. What is the name given to this bill?

• invoice

• . receipt

• . indenture

• warranty

Geoff Industries offers its credit customers a 2 percent discount if they pay within 10 days. This discount is referred to as a:

• collection discount.

• market discount.

• cash discount.

• market discount.

Any written proof that a customer owes you money for goods or services provided is referred to as a(n):

• sales draft

• credit instrument

• letter of debt.

• sales draft.

You are viewing a graph which compares costs with the amount of credit extended. Both the carrying costs and the opportunity costs of credit are depicted. What is the function called that represents the summation of these carrying and opportunity costs?

• optimal sales graph

• credit cost curve

• . credit extension curve

• . terms of sale graph

Assume that RSF is a wholly-owned subsidiary of the Rolled Steel Company. RSF provides credit financing solely for large ticket items purchased from the Rolled Steel Company. Which one of the following terms describes RSF?

• captive finance company

• service unit

• credit union

• parent company

The basic factors to be evaluated in the credit evaluation process, the five Cs of credit, are:

• character, capacity, control, cessation, and collatera

• character, capacity, capital, collateral, and conditions.

• . character, capacity, control, cessation, and collateral.

• conditions, character, capital, control, and capacity.