a firm switched from taking trade credit discounts to paying on the net due date, this might cost the firm some money, but such a policy would probably have only a negligible effect on the income statement and no effect whatever on the balance sheet.

Question

Quizplus · Accepted Answer

Switching from taking trade credit discounts to paying on the net due date can affect both the income statement and the balance sheet. The income statement may show increased interest expenses or reduced discounts, while the balance sheet may reflect changes in accounts payable and cash flow.

A Firm Switched from Taking Trade Credit Discounts to Paying