Indicate using a (+), (-), or (0) whether each of the following events would probablycause accounts receivable (A/R), sales, and profits to increase, decrease, or be affected inan indeterminate manner: A/RSalesProfitsThe firm restricts its creditstandards.The terms of trade are changedfrom 2/10, net 30, to 3/10, net 30.The terms are changed from2/10, net 30, to 3/10, net 40.The credit manager gets toughwith past-due accounts.

The question is based on the concept of change of financial event on bill receivables , sales and…

A/R Sales Profits The firm restricts its credit standards. The terms of trade are changed from 2/10, net 30, to 3/10, net 30. The terms are changed from 2/10, net 30, to 3/10, net 40. The credit manager gets tough with past-due accounts.

A/R Sales Profits The firm restricts its credit standards. The terms of trade are changed from 2/10, net 30, to 3/10, net 30. The terms are changed from 2/10, net 30, to 3/10, net 40. The credit manager gets tough with past-due accounts.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 4Q: Firm A had no credit losses last year, but 1% of Firm Bs accounts receivable proved to be...

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Question

Indicate using a (+), (-), or (0) whether each of the following events would probably
cause accounts receivable (A/R), sales, and profits to increase, decrease, or be affected in
an indeterminate manner:

A/R
Sales
Profits
The firm restricts its credit
standards.
The terms of trade are changed
from 2/10, net 30, to 3/10, net 30.
The terms are changed from
2/10, net 30, to 3/10, net 40.
The credit manager gets tough
with past-due accounts.

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