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

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

Vendor analysis has the greatest potential for savings for items which have:

a short lead time

a low annual usage

a low unit cost

a high annual dollar volume

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Verified step by step guidance

Understand the concept of vendor analysis: Vendor analysis is a process used by businesses to evaluate suppliers based on various criteria such as cost, quality, reliability, and efficiency. The goal is to identify opportunities for cost savings and improved performance.

Recognize the importance of annual dollar volume: Items with a high annual dollar volume represent a significant portion of a company's spending. Focusing on these items during vendor analysis can yield the greatest potential for savings because even small percentage improvements in cost or efficiency can result in substantial financial benefits.

Analyze why other options are less impactful: Items with a short lead time, low annual usage, or low unit cost typically have less financial impact on overall spending. While these factors are important, they do not offer the same potential for savings as high annual dollar volume items.

Prioritize high annual dollar volume items in vendor analysis: When conducting vendor analysis, allocate resources and efforts to evaluate suppliers for items with high annual dollar volume. This ensures that the analysis targets areas with the greatest potential for cost savings.

Apply this principle in practice: Use tools like Pareto analysis (80/20 rule) to identify the top items contributing to the majority of spending. Focus vendor analysis efforts on these items to maximize savings and efficiency.