The following is a list of activities that companies perform in relation to their receivables. For each of the activities listed below, select the appropriate purpose of the activity.
1. Selling receivables to a factor. Establish a payment period
2. Reviewing company ratings in The Dun and Bradstreet Reference Book of American Business. Evaluate the liquidity of receivables Accelerate cash receipts from receivable when necessary Monitor collections
3. Collecting information on competitors' payment period policies. Determine to whom to extend credit
4. Preparing monthly accounts receivable aging schedule and investigating problem accounts.
5. Calculating the accounts receivable turnover and average collection period.