A company increasing its credit terms for customers from 1/10, net 30 to 1/10, net 60 will likely experience:

a. An increase in cash on hand.

b. An increase in the average collection period.

c. Higher net income.

d. A higher level of uncollectible accounts.

Question

22 October, 03:56

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Answers (1)

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Malcolm Shelton · Answer 1

B is correct.

Explanation:

A higher level of uncollectible accounts may occur, but a longer average collection period will certainly occur.

A company increasing its credit terms for customers from 1/10, net 30 to 1/10, net 60 will likely experience:a. An increase in cash on hand.b. An increase in the average collection period.c. Higher net income.d. A higher level of uncollectible accounts.