Extending Credit to Customers Will Not Result in Which of the Following

question 100

Multiple Choice

Extending credit to customers will not result in which of the following additional costs?

• A)Increased wage costs will be incurred to evaluate customer creditworthiness,track what each customer owes,and follow up to ensure collection.
• B)Bad debt expense will result when amounts cannot be collected from customers.
• C)Delayed receipt of cash may result in requiring the company to take out short-term loans and incur interest costs.
• D)Decreased gross profit from reduced sales.

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Definitions:

Classic Automobile

A vehicle of significant historical interest, typically older models that are collected, preserved, or restored for their nostalgic value and beauty.

Simple Interest

The calculation of interest on the principal amount only, without compounding over time.

Higher Risk Investment

An investment with a greater chance of resulting in a loss or underperforming but potentially offering higher returns.

Balance

The total amount of money in a financial account, calculated by offsetting debits against credits.