The Rationale Behind Offering Customers Credit Is

question 57

Multiple Choice

The rationale behind offering customers credit is

• A) permitting customers to pay with credit cards or on credit makes it easier for them to buy, and it also attracts new customers.
• B) offering customers credit helps with the firm's cash flow position.
• C) offering customers credit helps match revenues with expenses for the same time period.
• D) permitting customers to pay with credit cards or on credit forces a company to rely less on accounts receivables and more on accounts payables.

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Definitions:

Cost Pool

A grouping of individual costs, typically by department or service, from which cost allocations are made.

Assigned

The process of designating or allocating resources, responsibilities, or tasks to individuals or groups.

Subunit Activities

Activities or tasks performed by individual parts of an organization, contributing to the overall operational goals.

Volume-Based Cost Driver

A measure that allocates costs based on the volume of goods produced or services rendered, such as units produced or hours worked.