A lockbox plan is 

*
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used to protect cash, i.e., to keep it from being stolen.

used to identify inventory safety stocks.
used to slow down the collection of checks our firm writes.
used to speed up the collection of checks received.
 
 
This is likely to happen when the company decides to increase their discount rate.
ITEM 1: Collection ----ITEM 2: Receivable Turnover----------ITEM 3:Collection Period  *
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a. Faster Higher Shorter

 
b. Faster Higher Longer
c. Slower Higher Shorter
d. Slower Higher Longer

 
For Mr. SATISFY-YOU, the average age of accounts receivable is 30 days, the average
age of accounts payable is 50 days, and the average age of inventory is 40 days.
Assume a 360-day year. If Mr SATISFY YOU’s annual sales are P900,000, what is the
firm’s average accounts receivable balance? *
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75000
 
 
STEAK Inc. had credit sales of P3,500,000 last year and its days sales outstanding
was DSO = 35 days. What was its average receivables balance, based on a 365-day
year? (ROUND OFF ANSWER TO NEAREST PESO) *
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335616
 
 
Statement I - If a firm takes actions that reduce its days sales outstanding (DSO), then,
other things held constant, this will lengthen its cash conversion cycle (CCC) and
cause a deterioration in its cash position. Statement II - Other things held constant, if a
firm "stretches" (i.e., delays paying) its accounts payable, this will lengthen its cash
conversion cycle (CCC). *
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a. Both statements are true

b. Only Statement I is true
c. Only Statement II is true
d. Both statements are false
 
 
LICKERER Corp's budgeted monthly sales are P5,000, and they are constant from
month to month. 40% of its customers pay in the first month and take the 2% discount,
while the remaining 60% pay in the month following the sale and do not receive a
discount. The firm has no bad debts. Purchases for next month's sales are constant at
50% of projected sales for the next month. "Other payments," which include wages,
rent, and taxes, are 25% of sales for the current month. Construct a cash budget for a
typical month and calculate the average cash gain or loss during the month. *
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1210