FGH requires a rate of return of 12.85% each year. Two of FGH;s suppliers, P and Q, are off
FGH requires a rate of return of 12.85% each year. Two of FGH’s suppliers, P and Q, are offering the following terms for immediate cash settlement:
Entity
Discount period
Normal settlement
P
1%
1 month
Q
2%
2 months
Which of the discounts should be accepted to achieve the required rate of return?
(A) Both P and Q
(B) P only
(C) Q only
(D) Neither of them
A retailing entity had cost of sales of $60,000 in April. In the same month, trade payables increased by $8,000 and inventory decreased by $2,000. What payment was made to suppliers in April?
(A) $50,000
(B) $54,000
(C) $66,000
(D) $70,000
Which ONE of the following services is NOT normally undertaken by a debt factor?
(A) Taking customer orders and invoicing
(B) Attempting to recover doubtful debts
(C) Making payments to entities before the cash is received from trade receivables
(D) Administering a entity’s sales ledger