3. Accounts receivable Effective credit management involves establishing credit standards for extending credit to customers, determining the company's credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company's Consider the case of Newtown Co.: Newtown Co. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Newtown Co. sells to its customers on credit terms of 3/10, net 30. If a customer bought $125,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Newtown Co. get from the customer? $112,500 $115,625 O $121,250 $100,000 If the customer paid off the account after 15 days, Newtown Co. would receive Approximately 20% of Newtown Co.'s customers take advantage of the discount and pay on the 10th day. The remaining 80% take an average of 35 days to pay off their accounts. What is Newtown Co.'s days sales outstanding (DSO), or the average collection period? 36.00 days 28.50 days 30.00 days O 25.50 days