Asked by Sichen Zhang on Jul 27, 2024
Verified
Increasing the discount for early payment by credit customers will tend to decrease the accounts receivable period.
Accounts Receivable Period
The average number of days that it takes for a company to collect payments owed by its customers after a sale has been made.
Early Payment Discount
An incentive offered by a seller to a buyer for paying a bill before the due date.
- Comprehend the role of credit management in affecting the firm's cash position.
Verified Answer
ZK
Zybrea KnightAug 03, 2024
Final Answer :
True
Explanation :
Increasing the discount for early payment incentivizes customers to pay sooner, thus reducing the time it takes to collect receivables and decreasing the accounts receivable period.
Learning Objectives
- Comprehend the role of credit management in affecting the firm's cash position.