Southern New Hampshire University
Module Four Homework
Please answer the following questions in paragraph form. Create in a Word document and upload.
1) What is receivables float?
Receivable float is the time between when a payment is issued and when it is received to the end user. This refers to the time the customer processes payment and when payment is received by the company collecting funds. This is typically the snail mail time, or the wire transfer time.
2) What is payables float? Payable's float is the timeframe between when the customer issues payment to the customer and when the customer receives payment. This is typically via snail mail, wire transfer, or credit card.
3) Name three ways to shorten the receivables cycle. Request Deposits Request upfront payments. Request C.O.D
4) Give one example of receivables fraud.
Skimming -- (informal - the action of stealing or embezzling money, especially in small amounts over a period of time.)
5) Name at least two different types of inventory valuation methods. Discuss the advantages and disadvantages of each method. FIFO -- First in, First Out i. Advantages -- easy to maintain. ii. Disadvantages -- overstate gross margin. LIFO -- Last in, First Out i. Advantages -- smaller tax liability ii. Disadvantages- harder to maintain.
6) A controller must consider many factors to assist in the determination of capital asset expenditures. Why is this planning important? Name two different accounting methods that might be used in the valuation of the expenditure. Discuss the advantages and disadvantages of both methods.
References:
Southern New Hampshire University https://blog.apruve.com/6-types-of-accounts-receivable-fraud
www.dictionary.