When deciding to accept a cash discount from a supplier, on what day is it advisable to take the financing? A) On the last day of the discount period, to see if they are able to meet the discount. B) On the first day of the discount period, so why wait? C) On any day of the discount period D) In the middle of the discount period, so there is no risk.
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2.-
When deciding to accept a cash discount from a supplier, on what day is it advisable to take the financing?
A) On the last day of the discount period, to see if they are able to meet the discount.
B) On the first day of the discount period, so why wait?
C) On any day of the discount period
D) In the middle of the discount period, so there is no risk.
Step by step
Solved in 2 steps
- Thinking about various payment terms for Accounts Payable, do you feel it is always valuable for a company to offer early payment discounts, and does this answer change based on the going prime rate?Differentiate between free and costly trade credit.What is the formula for determining the nominalannual interest rate associated with a credit policy?What is the formula for the effective annual interestrate? How would these cost rates be affected if afirm buying on credit could “stretch” either the discount days or the net payment days—that is, takediscounts on payments made after the discountperiod or else pay later than the stated paymentdate?Which of the following would not result in a reduction of the amount invoiced to a customer when a credit sale is made? A. Quantity discount B. Cash-free discount C. Sales discountD. Two-for-one special
- Determine the decision nature of each of the following issues: Will we purchase on credit or will we borrow in the short term and pay cash?Briefly discuss the following: 1. When does commercial credit occurs? 2. What attributes does commercial credit have? 3. What are the elements that influence the credit period? 4. What are the advantages of trade discounts? 5. When can we use anticipation rates?Which of the following refers to the ability of a firm to buy repeatedly from a supplier on trade credit without re-applying for credit? Select one: a. Net terms b. Cash discount c. Open account d. Present value of delayed payment
- 19. What is the effect of the lender's increasing the loan's interest rate just before closing A. The borrower has to pay it. B. Closing will be delayed. C. The borrower can choose to pay extra points. D. The real estate licensee is expected to pay the extra points.What is a credit card’s grace period? A) it is the amount of time after a purchase and before it starts accruing interest B) it is a period during which the card’s interest rate cannot change C) it is the amount of time between the bill being issued and your payment being due D) it is the period during which you can return the card and not incur any feesDescribe two advantages of using credit cards. ..... Choose the correct answer below. O A. Relatively low interest rates on unpaid balances and convenience of use. B. You get to use a product before actually paying for it and it provides a source of temporary emergency funds. C. May provide amenities and difficulty to overspend. D. Lack of caps on interest rates and fees.
- Which of the following statements are true regarding sales discounts (i.e., discounts customers receive for paying quickly)? I. Net Income differs between the net and gross methods when customers do not pay within the discount period. II. The net and gross methods do not affect the amount or timing of cash collected. III. Customers have to elect in advance whether they will pay in time to take the discount. Group of answer choices: I only II only III only I and II only II and III onlyWhich of these statements is true? A)There is no reason to pay off a loan early B) when shopping for a loan, you need to compare only APRs C) the more you owe, the higher your interest payment will be D) you can save money by making the smallest down payment the lender will allow16. What do you call for the likelihood of loss due to customers are not paying their amounts owing? a. Discount risk b. Credit risk c. Payment risk d. Loss risk