A Large Manufacturing Firm Has Been Selling on a 3/10,net

question 93

Multiple Choice

A large manufacturing firm has been selling on a 3/10,net 30 basis.The firm changes its credit terms to 3.5/9,net 25.What change might be expected on the balance sheets of its customers?

• A) Decreased receivables and increased bank loans.
• B) Increased receivables and increased bank loans.
• C) Decreased payables and increased bank loans.
• D) Increased payables and increased bank loans.

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Definitions:

Building Code

Regulations set by local governments regarding the design, construction, and occupancy of buildings to ensure public safety and health.

Petty Offense

A minor crime that is punishable by a small fine and/or imprisonment for less than six months in a jail.

Mail Fraud

A criminal act involving the use of postal services or electronic mail to carry out fraudulent schemes with the intent to deceive for personal gain.

False Pretenses

A legal term referring to the act of intentionally misrepresenting the truth to obtain property or money from another.