Term
| 3 goals of the revenue cycle |
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Definition
meet customer needs - quality/quantity, price and type
collect payment in timely fashion
provide support --> future sales |
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Term
| relevance of the revenue cycle |
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Definition
profit tacks on at the sale, one desires to create more profit opportunities
sale --> shipping --> billing --> collecting |
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Term
| payment options for "determining mktg/distr channels to generate sales" |
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Definition
debit and check - cash equivalent
open ("trade") accounts - accounts reveivable = credit but not secured debt. cause cash flow issues, no collateral, must sue in court for judgement then collection
store credit card - risk of loss, like A/R but is formal debt, cash flow - time between sale/payment
independent card - cash equivalent, but fees - 2-10% (interchange fee)
notes receivable - formal agreement, collateral, principal rate and time --> P x R x T = interest cost
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Term
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Definition
| indicates the terms as agreed between the seller and a common carrier |
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Term
| relevance of the expenditure cycle |
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Definition
| to be efficient through policy and procedure to minimize costs and increase revenue |
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Term
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Definition
| events that involve providing goods/services to customers |
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Term
| expenditure cycle definition |
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Definition
| events in which the business exchanges assets for goods and services |
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Term
| 3 goals of expenditure cycle |
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Definition
get the quantity and best wuality good/service at least cost when needed
ensure timely payment for good /service
develop good relationships with suppliers |
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Term
| remittance advice and sales invoice |
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Definition
customer payment to identify the correct account
requests payment from customer |
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Term
| annualized interest: 2/10, n/45 |
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Definition
365 x 02
45-10 1.00 - .02
365/(invoice days - discount days) x discount %/100% - discount%
bottom line: you're better off borrowing from a bank at less that 21.3% and pay bill within discount period |
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Term
| Interest rate calculation |
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Definition
| principal x annual rate x time = $ interest due |
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Term
| goal of the conversion cycle |
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Definition
| manufacture desired quality of products using resources efficiently and effectively |
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