CMA Study Group

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  • 1.  Query in this question.

    Posted 7 days ago
    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 6 days ago
    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 6 days ago
    Got it. Thanks!

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    PRAGATI VERMA
    Other
    ADITYAPUR (JAMSHEDPUR)
    India
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  • 4.  RE: Query in this question.

    Posted 6 days ago
    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