Southern New Hampshire University
Module Four Homework
Please answer the following ques ons in paragraph form. Create in a Word document and upload.
1) What is receivables oat? This created by having a gap in time due to the receivable's office failing to send out their invoices out to their customers with a timely manner, or within the time frame that has been established by the organization. This gap can also be created by the consumer not paying their invoice within the timeframe that the organization gives the customer for timely payment. (CareerRide, 2018).
2) What is payables oat? WebFinance (2018) defines payables float as the interval between the day the check is written (decreasing the firm's cash balance) and the day the amount is actually deducted from the firm's bank balance.
3) Name three ways to shorten the receivables cycle Remote Deposit Capture -- Incoming checks would be scanned in by the use of a scanning device. The bank would then accept the electronically converted check and post those funds to the organizations account based on the banks policies for making funds available, therefore depend on their funds availability schedule. Automated Clearinghouse (ACH) -- Funds typically clear within 1-2 business days. Used for electronic payment exchanges. Opening a Lockbox -- This is generally opened at a local Post Office. While the seller would be the person who opened the lockbox a remittance processor would be the one who accessed it.
4) Give one example of receivables fraud.
The example that comes to find after working with receivables and payables would be invoice fraud. The customer is billed one amount on the invoice that they receive from the organization, however they is actually a smaller amount that has been billed in the system. The receivables employee would they profit the difference of the two amounts.
Another possible example, I believe would be skimming. While this is a form of embezzlement, it is done over a long period of time, and typically seem with small amounts of monies.
Southern New Hampshire University
5) Name at least two di erent types of inventory valua on methods. Discuss the advantages and disadvantages of each method. Last In, First Out (LIFO) Advantages Produces a higher cost of goods sold and a lower balance of left-over inventory. Assumes that the most recently acquired inventory is sold, which creates a tax advantage for the organization. Disadvantages Numerous international accounting standards do not allow for this method. More difficult to maintain due to creating issues what could result in aged inventory never being shipped out of the company inventory, which also means that the older inventory is not being sold. Record Keeping would become more complex due to the unused inventory cost rising, and that cost does not leave the accounting system. First In, First Out (FIFO) Advantages Easy to apply system Inventory bottom line is more likely to approximate the current market value Income can not be manipulated through the inventory of the organization Disadvantages Ta