If a Firm Sells on Terms of 2/10,net 30 Days,and

question 79

True/False

If a firm sells on terms of 2/10,net 30 days,and its DSO is 28 days,then the fact that the 28-day DSO is less than the 30-day credit period tell us that the credit department is functioning efficiently and there are no past due accounts.​

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Definitions:

Properly Drawn

Pertains to documents or legal instruments that are prepared and executed correctly and according to all requisite legal standards.

Sufficient Funds

The availability of enough money in an account to cover checks or withdrawals.

Honor

The act of fulfilling or adhering to an agreement, contract, or request, demonstrating integrity and respect.

Postdated Check

A check written with a date in the future, which cannot be cashed or deposited until that date.