In response to market expectations, the credit period has been increased from 45 days to 60 days. this would result in a :
مارکیٹ کی توقعات کے جواب میں، کریڈٹ کی مدت 45 دن سے بڑھا کر 60 دن کر دی گئی ہے۔ اس کا نتیجہ ہوگا
- decrease in sales
- decrease in debtors
- increase in bad debts
- Increase in Average Collection Period.
Explanation
If the credit period is increased from 45 days to 60 days, this will result in more blockage of funds and will increase in the average collection period.
The credit policy of an organization consists of various elements like cash discount, collection period etc
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