Questions

Hi tutor,

I am confused with the “standard” answers required in the management of trade receivables policy. I know there is no such thing as a standard answer in ACCA exams, but the answers given in two separate questions are quite different from each other although they do ask for the same thing.

ACCA past exam 12/10
Question: discuss the factors that should be considered in formulating working capital policy on the management of trade receivables.

Answer provided:
-level of trade receivables
-Cost of trade credit
-Competitor trade terms
-Liquidity needs
-Risk appetite of management
-Availability of expertise in credit management

ACCA past exam 12/12
Question 2:
Discuss the factors to be considered in formulating a trade receivables management policy.

Answer provided: they talked about the elements of trade receivables policy.
-total credit
-credit control
-collection of amounts due
-changes to credit policy (policy should be reviewed regularly)

Sorry! After typing this question I realized the first question had stated “working capital policies on…” And I think working capital policies are concerned with the level of investment in current assets and procedures of day to day management of working capital etc. Could this be the reason for the difference in answers?

I have another doubt too,
When calculating NPV of an investment, should I round it up to (‘000s) if the question doesn’t tell me to?

Hope you could help me on this. Thanks!