Companies Frequently Use Information from the Following Sources When Conducting

question 72

Multiple Choice

Companies frequently use information from the following sources when conducting their credit analysis:
I.financial statement supplied by the customer;
II.payment history supplied by other firms;
III.payment history supplied by banks

• A)I only
• B)II only
• C)II and III only
• D)I, II, and III

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Definitions:

Sales and Direct Cost

The total revenue generated from goods and services minus the direct costs associated with producing those goods and services.

Activity-Based Costing

A method of costing that identifies the relationship between costs, activities, and products, and through this relationship, assigns indirect costs to products less arbitrarily than traditional methods.

Processing Costs

The expenses involved in handling, treating, or converting raw materials into finished products.

Equipment Expense

The cost associated with purchasing or maintaining equipment necessary for the operation of a business.