A 2/10,net 30 Credit Policy

question 21

Multiple Choice

A 2/10,net 30 credit policy:

• A)is an expensive form of short-term credit if a buyer foregoes the discount.
• B)provides cheap financing to the buyer for 30 days.
• C)is an inexpensive means of reducing the seller's collection period if every customer takes the discount.
• D)tends to have little effect on the seller's collection period.
• E)tends to increase a firm's investment in receivables as compared to a straight net 30 policy.

Understand the requirements and benefits of multiple support agreements.

Grasp what constitutes support for dependency exemptions.

Identify the income thresholds for qualifying relatives and benefits.

Comprehend the importance of Adjusted Gross Income (AGI) in tax calculations.

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Definitions:

Executive Summary

One- to two-page snapshot of what the overall business plan explains in detail.

Business Incubator

Local programs designed to provide low-cost shared business facilities to small start-up ventures.

Small Business Investment Companies (SBICs)

Privately owned and managed investment funds that are licensed and regulated by the SBA, providing capital to small businesses.

Government Loans

Financial aid provided by the government to individuals, businesses, or other organizations, often with more favorable terms than private loans.