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.

Identify and differentiate between the measures for evaluating and controlling investment center performance.

Apply the concept of investment turnover and its impact on return on investment.

Distinguish between investment centers, profit centers, and cost centers.

Calculate and interpret residual income.

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Definitions:

Subjective Accounts

Personal perspectives or descriptions of experiences, which are influenced by one's own feelings and opinions.

Physiological Viewpoint

The physiological viewpoint focuses on the biological basis of behavior, emotions, and mental states, emphasizing the role of the brain, nervous system, and other bodily functions.

Conscious Processes

Mental activities of which an individual is fully aware, including thoughts, feelings, and decisions.

Factor Analysis

A statistical approach designed to uncover hidden variables or factors that account for the observed correlation patterns within a set of variables.