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. The minimum financial strength a customer must have to be granted credit is indicated by the company's Consider the case of Ziff Corp.: Ziff Corp. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Ziff Corp. sells to its customers on credit terms of 1/10, 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 Ziff Corp. get from the customer? $100,000 $109,375 $112,500 If a customer bought $125,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Ziff Corp. get from the customer? $100,000 $109,375 $112,500 $123,750 If the customer paid off the account after 15 days, Ziff Corp. would receive Approximately 25% of Ziff Corp.'s customers take advantage of the discount and pay on the 10th day. The remaining 75% take an average of 35 days to pay off their accounts. What is Ziff Corp.'s days sales outstanding (DSO), or the average collection period? 33.06 days 28.75 days 27.31 days 24.44 days