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  • 1.  Query in this question.

    Posted 11-19-2022 01:39 PM
    Hello Folks!
    Can anyone pls explain why option 'b' will be the answer to this question?
      A company currently does not offer trade credit and requires cash payment on delivery. If it changes this policy and begins to offer trade credit, which terms of sale would be expected to cause the largest increase in accounts receivable? a. 1/10 net 30. b. 1/10 net 90. c. 2/10 net 90. d. 2/10 net 30.  


  • 2.  RE: Query in this question.

    Posted 11-20-2022 01:08 AM
    1/10 90 is correct in this way the account receivable will be more so B IS CORRECT 

    C is not correct 2/10 more discount for cash payment so probably the amount receivable will be lesser than the option B 



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    NISHAD CHENDRATH BHASKARAN
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  • 3.  RE: Query in this question.

    Posted 11-20-2022 11:12 AM
    Got it. Thanks!

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    PRAGATI VERMA
    Other
    ADITYAPUR (JAMSHEDPUR)
    India
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    Original Message


  • 4.  RE: Query in this question.

    Posted 11-20-2022 06:13 AM
    Hai,

    90 days is the maximum duration to have credit and 1% is least discount given, so from the given options these would results in maximum accounts receivable.

    Hope I explained well.



    Regards
    Sameeh




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