Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

Which of the following is the fastest way for a business to improve its cash inflow related to net sales?

Offer discounts for early payment to customers

Increase advertising expenses

Extend longer credit terms to customers

Delay billing customers for sales

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Verified step by step guidance

Understand the concept of cash inflow: Cash inflow refers to the money received by a business, often from sales, investments, or financing activities. Improving cash inflow means accelerating the receipt of cash into the business.

Analyze the options provided: Each option impacts cash inflow differently. For example, offering discounts for early payment incentivizes customers to pay sooner, while extending longer credit terms delays cash inflow.

Evaluate the impact of offering discounts for early payment: This strategy encourages customers to pay their invoices before the due date, improving cash inflow by reducing the time it takes to receive payments.

Consider the effect of increasing advertising expenses: While advertising may boost sales in the long term, it does not directly or immediately improve cash inflow related to net sales.

Assess the other options: Extending longer credit terms delays cash inflow, and delaying billing customers postpones the receipt of cash. Both of these options negatively impact cash inflow compared to offering discounts for early payment.