If a Business Allows a Customer to Buy on Credit

question 70

Multiple Choice

If a business allows a customer to buy on credit, which of the following increases?

• A) Debt
• B) Inventory
• C) Accounts Payable
• D) Accounts Receivable

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Definitions:

Mortgage Loan

A loan secured by the collateral of some specified real estate property, which the borrower is obliged to pay back with a predetermined set of payments.

Default

Failure to fulfill a legal obligation or agreement, typically in the context of a loan or contractual payment.

Down Payment

An initial payment made when something is bought on credit, representing a portion of the purchase price.

Purchase Price

The amount of money paid or to be paid by the buyer to acquire ownership of a product or property.