Which of the Following Statements About Extending Credit Is Not

question 24

Multiple Choice

Which of the following statements about extending credit is not true?

• A)It is common for companies to sell on account to other companies.
• B)Some companies extend credit to individual consumers.
• C)Bad debts arise from credit sales to individual consumers,but not from credit sales to other companies.
• D)When credit is available,customers often buy more products and services.

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Definitions:

Variable Factory Overhead

This includes costs of factory operations that vary directly with the volume of output, such as utilities and supplies used in production.

Fixed Factory Overhead

Regular, consistent costs associated with operating a manufacturing facility that do not fluctuate with production volume.

Direct Labour

The cost of wages for workers directly involved in the manufacture of products or the delivery of services.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as factory rent and salaries of permanent staff.