To Reduce the Time and Expense of Collecting Accounts Receivables,some

question 114

Multiple Choice

To reduce the time and expense of collecting accounts receivables,some firms:

• A)extend credit to new customers.
• B)offer extended payment plans to existing customers.
• C)adopt a just-in-time inventory policy.
• D)accept bank-issued credit cards.

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Definitions:

Credit Period

The duration of time a buyer is allowed to pay for goods or services received, before interest or penalties begin accruing.

Collection Policy

The specific strategies and methods a company uses to manage the collection of its accounts receivable.

Credit Policy

The guidelines a company follows to determine the amount of credit to extend to customers and the terms of payment.

Credit Period

The time frame allowed by a seller for a buyer to pay for goods or services received, typically measured in days or months.