The Effect of a Change in a Firm's Credit Terms

question 73

Multiple Choice

The effect of a change in a firm's credit terms from "net 30" to "2/10, net 30" on its own balance sheet is likely to be ____.

• A) decreased accounts receivable
• B) increased accounts receivable
• C) decreased accounts payable
• D) increased accounts payable

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Definitions:

Outgroup Homogeneity

The perception that members of an outgroup are more similar to each other than they really are, typically compared to the perceived diversity within one's own group.

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, often leading to an oversimplification of cause and effect.

Ingroup Bias

The tendency to favor one's own group over other groups, often leading to preference and loyalty towards members of the ingroup.

Bystander Effect

A phenomenon in social psychology where people are less inclined to assist a victim if there are other bystanders.