A ﬁrm revises its credit policy and begins selling all goods for cash only, no credit. It will likely experience an acceleration in collection of revenues due to the __________ effects of its credit
Policy.

Question

Quizplus · Accepted Answer

By eliminating credit sales, the firm will no longer have to wait for customers to pay their bills and can instead collect all revenues immediately. This will result in an acceleration of revenue collection, as there is no longer a delay caused by customers taking advantage of credit terms.

A ﬁRm Revises Its Credit Policy and Begins Selling All