accounting

posted by .

The lag between purchase date and the date at which payment is due is known as the "terms lag". The lag between the due date and the date on which the buyer actually pays is termed the "due lag", and the lag between the purchase and actual payment dates is the "pay lag".

Thus Pay lag=terms lag + due lag

State how you would expect the following events to affect each type of lag:

a)The company imposes a service charge on late payers.
b)A recession causes customers to be short of cash.
c)The company changes its terms from net 10 to net 20.

  • accounting -

    a. Due lag and pay lag fall.
    b. Due lag and pay lag increase.
    c. Terms lag and pay lag increase.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. accounting

    Payment Lag- The lag between purchase date and the date at which pay is due is known as term lag. The lag between the due date and the date on which the buyer actually pays is termed due lag,and lag between the purchase and actually …
  2. Maths

    Use the United States Rule and/or Banker’s Rule to determine the balance due on the note at the date of maturity. (The effective date is the date the note was written.) Principal - 6000 Rate - 5% Effective Date - May 15 Maturity …
  3. Maths

    Principal - 6000 Rate - 5% Effective Date - May 15 Maturity Date - November 1 Partial Payment Amount - $1500 Partial Payment Date -August 15 Also Answer the following questions: 1. NUMBER OF DAYS BETWEEN EFFECTIVE DATE AND PARTIAL …
  4. Maths

    Frosni receieved her credit card statement, which showed she owed $5850. Interest is charged at 19.5%pa on overdue balances. She paid 15% of this amount by the due date, How much interest is charged if she pays the remainder 20 days …
  5. math

    A partial payment is made on the date(s) indicated. Use the United States Rule to determine the balance due on the note at the date of maturity. (The Effective Date is the date the note was written.) Assume the year is not a leap year. …
  6. Mathematics

    An invoice is dated January 24 with terms 2/10 – 20x. Find the final discount date and the net payment date. The net payment date is 20 days after the final discount date. The final discount date is 2/23. The net payment date is …
  7. Math

    Ned's Sheds purchase building materials from Timbertowm Lumber for $3,700 with terms of 4/15, n/30. The invoice is dated October 17. Ned's decides send in a $2,000 partial payment. Question 1: What is the net date?
  8. Business Math

    Using the dating method, calculate the discount date and the net date. Unless otherwise specified, the net date is 20 days after the discount date: The date of invoice is April 6th, Terms of sale is 2/10, EOM. What is the Discount …
  9. Math

    50% Rule: The repackaged vial or unit dose must have an expiration date placed on it; but it is not the same expiration date as what is on the stock bottle. You must take the date on the stock bottle and write the half way date between …
  10. Business math

    An invoice is dated January 25 with terms 2/10 -20x. Find the final discount date and the net payment date. The net payment date is 20 days after the final discount date.

More Similar Questions