Question

A company increasing its credit terms for customers from 1/10, net 30 to 1/10, net 60 will likely experience:

a. An increase in cash on hand.
b. An increase in the average collection period.
c. Higher net income.
d. A higher level of uncollectible accounts.

Answer 1

B is correct.

Step-by-step explanation:

A higher level of uncollectible accounts may occur, but a longer average collection period will certainly occur.