Which of the following terms would tend to minimize a firm's investment in accounts receivable?
A)Net 15
B)Net 30
C)1/15 net 45
D)2/10 net 30

Question

Quizplus · Accepted Answer

The term "2/10 net 30" means that the buyer can receive a 2% discount if they pay within 10 days, otherwise the full payment is due in 30 days. This incentivizes buyers to pay earlier and therefore minimizes the amount of time the firm's funds are tied up in accounts receivable.

Which of the Following Terms Would Tend to Minimize a Firm's