Cash, receivables, or inventory
Not what you're looking for?
Which of the following is the most important for an organization to manage: cash, receivables, or inventory? Defend you answer.
How can different accounting methods impact an organization's net income?
Purchase this Solution
Solution Summary
This solution addresses whether cash flow, receivables or inventory are more important for an organization to manage and why, as well as how different accounting methods affect the net income of an organization.
Solution Preview
Cash flow is the most important for an organization to manage. Cash flow it is the lifeblood of a business. Cash is absolutely critical in the growth and well being of a business.
Cash flow serves several purposes.
- First, it is used for meeting normal cash obligations such as paying bills.
- Second, it is held as a precautionary measure for unanticipated problems.
- Third, it is held for potential investment purposes.
The term "cash" refers to those assets that are liquid and have immediate cash redemption value such as cash and checks.
Operating cycle is defined as the system through which cash flows:
- from the purchase of inventory
- through the collection of accounts receivable.
It measures the flow of assets into cash and is, in effect, a business stopwatch.
For example, the operating cycle may begin with cash and inventory on hand. A company purchases additional ...
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Motivation
This tests some key elements of major motivation theories.