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    This post addresses credit terms and indebtedness.

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    Optical Supply Company offers credit terms of 2/10, net 60. If Optical Supply is considering a change in its credit terms to one of those indicated, explain whether the change should increase or decrease sales. (a) 2/10, net 30, (b) net 60, (c) 3/15, net 60, (d) 2/10, net 30, 30 extra.

    Question: If the (A) terms were offered to a customer as opposed to their current terms (2/10 net 60), what might this suggest regarding the indebtedness of the customer? What may be some other factors for the supplier to change the terms?

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    https://brainmass.com/business/credit-management-credit-policy-analysis-and-risk/this-post-addresses-credit-terms-and-indebtedness-472323

    Solution Preview

    Optical Supply Company offers credit terms of 2/10, net 60.

    Which means that they can take 2% off of the balance if it is paid within ten days, and the remainder is due within 60 days.

    (a) 2/10, net 30,

    This would decrease sales because the discount would remain the same, but the balance would be due in a shorter time, which is now 30 days.

    (b) net 60,

    This would decrease sales because ...

    Solution Summary

    The solution provides a detailed explanation to the Optical Supply Company case that asks the following question, If the (A) terms were offered to a customer as opposed to their current terms (2/10 net 60), what might this suggest regarding the indebtedness of the customer? What may be some other factors for the supplier to change the terms?

    $2.19