Ask Question
16 January, 16:03

When a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determine because the nondiscount takers paying earlier will reduce the accounts receivable investment, while the new customer accounts will increase this investment.

A. True

B. False

+3
Answers (1)
  1. 16 January, 17:33
    0
    Yes is True that when a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determine because the nondiscount takers paying earlier will reduce the accounts receivable investment, while the new customer accounts will increase this investment.

    Explanation:

    Accounts Receivable is any amount of money owed by customers for purchases made on credit. It is an asset account on the balance sheet since it is money due in the short run.

    As a current asset, Accounts Receivable is an important aspect of a businesses' fundamental analysis used to measures a company's liquidity or ability to cover short-term obligations without additional cash flows.

    Accounts receivable Investment will be reduced if the firm initiates or increases a cash discount.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “When a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determine because ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers