The Main Purpose of a Business's Credit Policy Is To

question 8

Multiple Choice

The main purpose of a business's credit policy is to:

• A)Enable the business to issue credits reports and litigate easily.
• B)Clarify the circumstances and terms on which credit will be advanced to customers and how debts will be managed.
• C)Clarify the circumstances and terms on which the business will borrow money and pay its existing debts.
• D)Build good relationships with customers by advancing credit to them whenever possible.

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Definitions:

Supply Curve

An illustration that demonstrates the correlation between a good or service's price and the amount made available in a specific period.

Demand Curve

A graph representing the relationship between the quantity of a good consumers are willing and able to purchase and the price of the good.

Supply

The total amount of a specific good or service that is available to consumers at a given price level in a given time period.

Demand

The measure of products or services that consumers are eager and equipped to purchase at varying prices during an established interval.