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Change in credit terms

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A large manufacturing firm has been selling on a 3/10, net 30 basis. The firm changes its credit terms to 2/20, net 90. What change might be expected on the balance sheet of its customers? I don't understand what these terms mean.

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The solution explains the impact on the balance sheet of the customers of a change in credit terms

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The term 3/10, net 30 means that if the customer pays in 10 days, they can take a 3% discount else they should pay in 30 days. In the same way 2/20 net 90 means that if the customer pays in 20 days they can take a 2% discount else pay in full in 90 days.

When a customer purchases on credit, it would be reflected as Accounts payable in the customers balance sheet. When the selling firm ...

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