What are the differences between receiving payment on a collection basis, on an average collection basis, and on a maturity basis?
What will be an ideal response?
Factors pay exporters in a variety of ways. One is on a collection basis. Under this arrangement, the exporter gets paid when the factor receives funds from the importer. Exporters also get paid by factors when the importer is declared insolvent or when a specific political event in the contract occurs that prevents the importer from paying.
The exporter may also receive payment on an average collection basis, which reflects the past experience of the factor collecting from an importer. The factor calculates the average number of days that a particular exporter's customers have taken to pay and remits payment to the exporter in the following month, based on that average experience. For example, if an importer pays earlier or later than average, the exporter receives interest from or pays interest to the factor.
Funds can also be remitted on a maturity basis. Under this method, the factor calculates the weighted-average maturity date of all invoices maturing in a particular month, adds a specified number of collection days, and pays the sum of that month's invoices on that date.
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When it is time to make a payment, an approved voucher is sent to the accounts payable department
Indicate whether the statement is true or false
Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: 1. Andrea invested $13,900 cash in the business in exchange for common stock. 2. Andrea contributed $24,000 of photography equipment to the business. 3. The company paid $2500 cash for an insurance policy covering the next 24 months. 4. The company received $6100 cash for services provided during January. 5. The company purchased $6600 of office equipment on credit. 6. The company provided $3150 of services to customers on account. 7. The company paid cash of $1900 for monthly rent. 8. The company paid $3500 on the office equipment purchased in transaction #5 above. 9. Paid $315 cash for January utilities. Based on
this information, the balance in the cash account at the end of January would be: A. $16,050. B. $19,900. C. $14,935. D. $46,650. E. $11,785.
A court ruled that a town government can condemn private homes so that the homes can be torn down and the land can be used by local developers to build offices, restaurants and stores, which will increase the tax revenues of the town
Which of the following ethical norms is illustrated in this scenario? A) freedom B) security C) justice D) efficiency
The Lanham Act
A. provides legal guidelines for product warranties. B. forces all companies to register their brands. C. deals with deceptive product claims and advertisements. D. describes the kinds of marks that can be protected and the methods for doing so. E. protects consumers against unsafe products.