If a firm fails to take trade credit discounts it may cost the firm money, but generally such a policy has a negligible effect on the firm's income statement and no effect on the firm's balance sheet.

Question

Quizplus · Accepted Answer

Failing to take trade credit discounts will increase the cost of goods sold and decrease net income, thus affecting the firm's income statement. However, it does not affect the firm's balance sheet.

If a Firm Fails to Take Trade Credit Discounts It