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How will canceling cash discounts will effect sales, accounts receivable, bad debt, profit

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When a firm decreases or cancels a cash discount, sales are expected to _______, the investment in accounts receivable is expected to ________, the bad debt expense is expected to __________, and the profit per unit is expected to _______.

(a) decrease; increase; increase; increase

(b) decrease; decrease; increase; increase

(c) increase; increase; decrease; decrease

(d) increase; decrease; decrease; decrease.

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The solution explains each of the four part response about the effect of decreasing or canceling cash discounts.

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When a firm decreases or cancels a cash discount, sales are expected to "decrease" (less ...

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