At a meeting to discuss the liquidity problems of a firm, the following proposals are made: (a)

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At a meeting to discuss the liquidity problems of a firm, the following proposals are made:

(a) an increase in the depreciation expense to conserve more cash in the firm.

(b) a reduction in the credit given on sales from 60 days to 30 days..

(c) an increase in the credit taken on purchases to 60 days Ii'om 90 days.

(d) an increase in the working capital cycle from 40 days to 50 days.

(e) an issue of 1000 shares as a scrip issue.
(j) an amendment to accounting bases which will result in increased profits in the future.
Comment on these proposals.

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Accounting An Introduction

ISBN: 193112

1st Edition

Authors: Arthur Hindmarch, Etc.

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