Which One of the Following Statements Is Correct

question 126

Multiple Choice

Which one of the following statements is correct?

• A) If the majority of your new customers become repeat customers then there is a strong argument against extending credit even if the default rate is low.
• B) A customer's past payment history is not indicative of their future payment history.
• C) A suggested policy for offering credit to new customers is to limit the amount of their initial credit purchase.
• D) The risk of issuing credit is the same for a new customer as it is for an existing customer.
• E) The recommended credit policy for new customers is to extend the maximum amount you are willing to ever extend to that customer as their initial credit limit.

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Definitions:

Laundry Services

A service offering washing, drying, and often ironing of clothes and linens for customers.

Stockholders

Owners of a corporation due to their purchase of stock in the corporation.

Family-Owned Businesses

Enterprises owned and operated by members of one or more families, often passed down through generations.