Asked by Chintan Kothari on Jul 22, 2024
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Granting discounts for cash sales will tend to decrease the accounts receivable period.
Cash Sales
Transactions where payment is made in full at the time of the sale, typically in cash or equivalent.
Accounts Receivable Period
The mean period required for a company to collect payments due from its clients.
Discounts
A reduction from the usual cost of something, often applied to prompt payment or for certain customers like students or seniors.
- Analyze how credit policies affect the flow of cash and the length of the cash cycle.
Verified Answer
Learning Objectives
- Analyze how credit policies affect the flow of cash and the length of the cash cycle.
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