If a company tightens its credit policy from 2/10, net 30 to 2/10, net 20, we expect to see the days sales outstanding:
A) increase.
B) decrease.
C) stay the same.

Question

Quizplus · Accepted Answer

By tightening its credit policy from net 30 to net 20 days, the company reduces the time customers have to pay their invoices, which should lead to a decrease in the days sales outstanding (DSO) as receivables are collected more quickly.

If a Company Tightens Its Credit Policy from 2/10, Net