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Ch 19: Credit & Inventory Management

About This Chapter

These lessons will help you understand credit policies and what methods are used to track inventory. Each lesson comes with a quiz to help you make sure you've learned what you need.

Credit & Inventory Management - Chapter Summary and Learning Objectives

Explore the mechanics of how businesses set up and run their credit policies and how they track and manage inventory. The brief video lessons come with a written transcript that can help you ensure your understanding of the material. At the end of the chapter you will have covered:

  • Credit policy and receivables
  • Components of a credit policy
  • Analyzing credit policies
  • Total cost curves
  • Organizing the credit function
  • Granting credit
  • Monitoring receivables
  • Inventory systems
  • Inventory management
  • Credit policy analysis

Video Objective
Credit Policy & Receivables Examine the components of credit policy, cash flows, and receivables.
Components of Credit Policy: Terms of Sale Study credit periods, cash discounts, and credit instruments.
How to Analyze a Credit Policy Investigate the evaluation of credit policy and its effects.
Total Cost Curve & Organizing the Credit Function Look at the total cost curve and how to organize the credit function.
Evaluating, Scoring & Granting Credit Discover why credit should be granted or withheld.
Monitoring Receivables in a Collection Policy Learn how receivables are monitored in a collection policy.
Perpetual and Periodic Inventory Systems Explore the financial manager, inventory policies, and systems of recording inventories.
Inventory Management Techniques Learn about the ABC approach, the economic order quantity-model, and managing derived-demand inventories.
Credit Policy Analysis: One-Shot & Accounts Receivables Approaches Study the one-shot approach and the accounts receivables approach, and look at discounts and default risk.

9 Lessons in Chapter 19: Credit & Inventory Management
Test your knowledge with a 30-question chapter practice test
Credit Policy & Receivables

1. Credit Policy & Receivables

In this lesson, we will learn about credit policies and receivables. As you can imagine, having customers who can, and do, pay on time is essential to a company's success in the business world.

Components of Credit Policy: Terms of Sale

2. Components of Credit Policy: Terms of Sale

In this lesson, we'll define credit policy. You'll learn the three components of building a credit policy: terms of sale, credit extension and collection policy. We'll also explore the 5 Cs of credit and other credit analysis alternatives.

How to Analyze a Credit Policy

3. How to Analyze a Credit Policy

In business-to-business sales, customers often use credit to pay for products or services. The seller extends the credit to the buyer under certain terms and conditions. In this lesson, we will learn how to create and analyze a new credit policy.

Total Cost Curve & Organizing the Credit Function

4. Total Cost Curve & Organizing the Credit Function

How much credit can a business offer to its customers? In this lesson, we'll look at the total credit cost curve, including what it is and how it can be graphed. In addition, we'll examine how to organize the credit function of a business.

Evaluating, Scoring & Granting Credit

5. Evaluating, Scoring & Granting Credit

Offering credit can help bring in new customers. But how does a company know how much credit to extend? In this lesson, we'll look at how to evaluate customers to determine how much credit to grant.

Monitoring Receivables in a Collection Policy

6. Monitoring Receivables in a Collection Policy

Any company that offers credit to customers needs a collection policy. In this lesson, we'll examine what a collection policy is and how to monitor receivables to make sure that your business is collecting all the money owed.

Perpetual and Periodic Inventory Systems

7. Perpetual and Periodic Inventory Systems

Inventory management is an important part of business success. In this lesson, we will discuss the two types of inventory systems used in accounting today.

Inventory Management Techniques

8. Inventory Management Techniques

How does a company know how much inventory to keep on hand? In this lesson, we'll examine inventory management and discuss three major approaches: the ABC approach, the economic order quantity model, and derived-demand inventory.

Credit Policy Analysis: One-Shot & Accounts Receivables Approaches

9. Credit Policy Analysis: One-Shot & Accounts Receivables Approaches

Companies that offer credit to their customers take on the risk that borrowers will default. How can a company know if offering credit is a good investment? In this lesson, we'll examine two approaches to answering that question.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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