Which of the Following Is a Benefit of Selling on Credit

question 53

Multiple Choice

Which of the following is a benefit of selling on credit?

• A)Revenues are increased by making sales to a wider range of customers.
• B)Expenses are reduced by making sales to a wide range of customers.
• C)Some customers do not pay, creating an expense.
• D)Cash is received sooner.

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Definitions:

Net Worth

The total assets minus total external liabilities of an individual or a company, indicating their overall financial position.

Liabilities

Financial obligations or debts owed by a company or individual to others, which must be settled over time through the transfer of economic benefits.

Non-Interest-Bearing Reserve Deposits

Bank reserves held in a central bank that do not earn any interest for the commercial bank.

Legal Reserves

Funds that banks are legally required to hold in reserve against deposits made by their customers, either as cash in the bank or as deposits in the central bank.