If the firm's cash discount period is decreased or cancelled, the sales volume can be expected to,___________ the bad debt expenses can be expected to___________ , and the profit per unit can beexpected to___________ _.

Question

If the firm's cash discount period is decreased or cancelled, the sales volume can be expected to,___________  the bad debt expenses can be expected to___________  , and the profit per unit can beexpected to___________ _.

Quizplus · Accepted Answer

Reducing or canceling the cash discount period may lead to a decrease in sales volume as customers may be less incentivized to pay early. This can result in an increase in bad debt expenses as customers may delay payments or default. However, profit per unit may increase as the firm retains more revenue by not offering discounts.

If the Firm's Cash Discount Period Is Decreased or Cancelled