The Accounts Receivable Approach Supports the Theory That

question 47

Multiple Choice

The accounts receivable approach supports the theory that:

• A) Your risk of offering credit to a new customer is limited to your cost of the items sold.
• B) The best credit policy is an all-cash policy.
• C) The cost of offering credit to a new customer is the same as the cost of offering credit to
• an existing customer.
• D) Foregoing cash discounts is a method of obtaining inexpensive short-term financing.
• E) The default risk of a credit policy is the same as the default risk under an all cash-policy if
• your customers remain the same.

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