A Business's Credit Policy Will Not Generally Address

question 21

Multiple Choice

A business's credit policy will not generally address:

• A)the circumstances and terms on which the business will distribute funds to its creditors.
• B)the circumstances in which a client will be given credit.
• C)the repayment methods and terms the business will accept.
• D)the process for recovering debt and the circumstances in which it will be activated.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in a given period, and must be paid out before common shareholders can receive dividends.

Noncumulative Preferred Stock

A type of preferred stock where dividends are not accumulated if they are not declared.

Par Value

The face value of a bond or stock as stated by the issuer, which does not necessarily reflect its market value.