Businesses Are Often Required to Extend Credit as a Means

question 5

Multiple Choice

Businesses are often required to extend credit as a means of increasing sales.Before granting credit,businesses are encouraged to take any of the following steps EXCEPT

• A)take advantage of the available public records of credit history,proposals,and bankruptcies.
• B)search both the corporate name of the debtor and its directors and officers to determine if the company is merely a fresh start after a bankrupt business.
• C)not request personal guarantees of the principals because the company's agreement to pay will always suffice.
• D)take security in the goods provided.
• E)set up a control system to monitor lien periods for building supplies and limitation periods.

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Definitions:

Reverse Discrimination Theory

A concept suggesting that policies favoring minorities and women for historical redress can lead to unfair treatment of the majority group.

Pay Equity Theory

A theory that emphasizes fairness in compensation for work, focusing on ensuring that pay is equitable for jobs requiring comparable levels of skill and responsibility.

Nonfinancial Compensation

Benefits or incentives provided to employees that do not involve direct payment, such as health insurance, retirement plans, or company car.

Employee Recognition Programs

Schemes designed to acknowledge and reward employees for their performance and contributions to the organization.