Which of the following is TRUE of changes in cash discount period?
A)If a firm increases its cash discount period,the sales are expected to decrease,the bad debts are expected to decrease,and the profit per unit is expected to increase.
B)If a firm decreases its cash discount period,the sales are expected to decrease,the bad debts are expected to decrease,and the profit per unit is expected to increase.
C)If a firm increases its cash discount period,the sales are expected to increase,the bad debts are expected to decrease,and the profit per unit is expected to decrease.
D)If a firm decreases its cash discount period,the sales are expected to decrease,the bad debts are expected to increase,and the profit per unit is expected to decrease.

Question

Quizplus · Accepted Answer

Increasing the cash discount period encourages more customers to pay early, potentially increasing sales and reducing bad debts, but it may decrease profit per unit due to the discount offered.

Which of the Following Is TRUE of Changes in Cash