One Effect of Granting Credit to Customers Is That Both

question 305

True/False

One effect of granting credit to customers is that both the cost of default and the cost of discounts must be considered before granting credit.

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Definitions:

Inventory

Items, such as raw materials, work-in-progress, and finished goods, that a company holds with the intention of selling them.

Operating Activities

Day-to-day business functions and transactions that affect a company's net income, primarily revenue and expense activities.

Net Income

The amount of money that remains after subtracting all expenses, taxes, and costs from total revenue.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed.