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Which of the following is NOT commonly regarded as being a credit policy variable? * Collection policy. Cash discounts. Payments deferral period. O Credit period. O Credit standards.

Which of the following is NOT commonly regarded as being a credit policy variable? * Collection policy. Cash discounts. Payments deferral period. O Credit period. O Credit standards.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statements is most correct? * An aging schedule is used to determine what portion of customers pay cash and what portion buy on credit. If a firm changes its credit terms from 1/20, net 40 days, to 2/10, net 60 days, the impact on sales can't be determined because the increase in the discount is offset by the longer net terms, which tends to reduce sales. Aging schedules can be constructed from the summary data provided in the firm's financial statements If a firm's volume of credit sales declines then its DSO will also decline. The DSO of a firm with seasonal sales can vary. While the sales per day figure is usually based on the total annual sales, the accounts receivable balance will be high or low depending on the season.
Transcribed Image Text:Which of the following statements is most correct? * An aging schedule is used to determine what portion of customers pay cash and what portion buy on credit. If a firm changes its credit terms from 1/20, net 40 days, to 2/10, net 60 days, the impact on sales can't be determined because the increase in the discount is offset by the longer net terms, which tends to reduce sales. Aging schedules can be constructed from the summary data provided in the firm's financial statements If a firm's volume of credit sales declines then its DSO will also decline. The DSO of a firm with seasonal sales can vary. While the sales per day figure is usually based on the total annual sales, the accounts receivable balance will be high or low depending on the season.
Which of the following is NOT commonly regarded as being a credit policy variable? * O Collection policy. Cash discounts. Payments deferral period. O Credit period. O Credit standards.
Transcribed Image Text:Which of the following is NOT commonly regarded as being a credit policy variable? * O Collection policy. Cash discounts. Payments deferral period. O Credit period. O Credit standards.
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