A Firm's Credit Terms Specify "1/10 Net 30" and the Accounts

question 111

Multiple Choice

A firm's credit terms specify "1/10 net 30" and the accounts receivable days outstanding is 32 days.Which of the following can be concluded on the basis of this information?

• A)Most customers pay on time.
• B)The average customer pays two days late.
• C)All customers have paid within 32 days of purchase.
• D)All customers pay late.
• E)No customers have paid within 32 days of purchase.

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Definitions:

Debt Service Funds

Governmental funds used to account for the accumulation of resources for, and the payment of, long-term debt principal and interest.

Restricted

Refers to funds or assets that are earmarked for specific purposes and cannot be used for general expenditures.

Nonspendable

Funds not available for spending because they are legally or contractually required to remain intact.

Committed

In finance, "committed" refers to a pledge or firm agreement to execute a financial transaction or investment.