CFA mock afternoon Q78 accounts, customers, afternoon, increase

RealEstate_CFA

i am not sure what the question is asking, it says a company extends its trade credit terms by 4 days to all its credit customers. the the number of days of outstanding receivables would increase, but the answer says accounts payable was the one being extended. isnt it odd that the company is "paying" its customers?

dontknow1987

Gotcha...

The most likely effect TO THE COMPANY'S credit customers is....

So if the company is giving more days to pay, the credit customer's days payable should decrease. Thus it will decrease THEIR (credit customer's) net operating cycle.

I got confused on this one too..easy to miss if you are in a hurry.

Bluetick1010

I got owned on this too.

CFAI really punishes you for not reading carefully...