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

question 52

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.

Comprehend the specific circumstances under which specific performance and replevin can be sought as remedies.

Recognize the conditions under which consequential and incidental damages can be recovered.

Grasp the importance of the party's ability to recover goods or damages in cases of insolvency or wrongful acts.

Identify the legal implications and remedies available for wrongful rejection or repudiation of goods.

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Definitions:

Normal Credit Balance

The expected balance on the credit side of an account, indicating an increase in liabilities, revenue, or equity.

Sales Discounts

Reductions in the selling price offered by a seller to encourage prompt payment by the buyer.

Sales Returns

Transactions involving the return of goods by customers, which reduce the total sales revenue.

Discount Period

The time frame within which a buyer can pay less than the full amount due on an invoice due to early payment incentives offered by the seller.