How will this change in policy affect accounts receivable


Question: Essence of Skunk Fragrances, Ltd. sells 5600 units of its perfume collection each year at a price per unit of $425. All sales are on credit with terms of 1/10, net 40. The discount is taken by 60 percent of the customers, by its main competitor, Sewage Spray. Essence of Skunk is considering a change in its credit policy to terms of 2/10, net 30 to preserve its market share. How will this change in policy affect accounts receivable?

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Accounting Basics: How will this change in policy affect accounts receivable
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