Selling accounts receivables to factors and allowing credit terms such as 2/10, n/30 Select one: a. All of these answer choices are correct. b. result in collections that are less than the gross accounts receivable. c. represent ways to accelerate receivables collections. d. represent common business practices.

a. All of these answer choices are correct

Explanation:

The credit term The term 2/10, n/30 is a typical credit term and means that,

2 shows the percentage discount being offered by the seller so 2%.

"10" is the number of days within which a buyer must pay their invoice to qualify for the discount.

"n/30" means that if the buyer does not pay the amount in 10 days then they have to pay the full amount in 30 days.

This term therefore results in collections that are less than the gross accounts receivable (b), represent ways to accelerate receivables collections (c) as time limits are imposed and is quite a common business practice (d).

All of the above are correct in this instance.

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