Asked by I’m Ashes on Jul 06, 2024
Verified
Which one of the following statements is correct concerning the credit period?
A) The credit period begins when the discount period ends.
B) The discount period is the length of time granted to a customer to pay their bill.
C) The credit period begins on the invoice date.
D) With terms of 2/10, net 20, the credit period is 10 days.
E) With EOM dating, all sales are assumed to have occurred on the 15thof each month.
Credit Period
The duration during which a buyer can pay for purchased goods or services without incurring interest or penalties.
Discount Period
The time period between the present date and the maturity date of a bill of exchange or a delayed payment, during which a discounted price may be applied.
Invoice Date
The date when an invoice is generated or issued, marking the start of the payment term period.
- Analyze the effects of diverse variables on the credit period length a firm extends.
Verified Answer
ZK
Zybrea KnightJul 08, 2024
Final Answer :
C
Explanation :
The credit period typically starts on the invoice date, which is when the seller bills the customer for the purchase. This period extends until the payment is due according to the terms of sale.
Learning Objectives
- Analyze the effects of diverse variables on the credit period length a firm extends.