The effect of a change in a firm's credit terms from "net 30" to "2/10, net 30" on its customers' balance sheets is likely to be ____.
A) decreased accounts receivable
B) increased accounts receivable
C) decreased accounts payable
D) increased accounts payable

Question

Quizplus · Accepted Answer

When a firm changes its credit terms to "2/10, net 30," customers are incentivized to pay earlier to take advantage of the discount, which would decrease their accounts payable.

The Effect of a Change in a Firm's Credit Terms