Which of the Following Statements Is Correct

question 37

Multiple Choice

Which of the following statements is correct?

• A)The optimal credit policy is determined primarily by the industry in which the firm operates and by current economic conditions.
• B)Normally, when a credit sale is made, inventory is reduced by the cost of goods sold and an equal amount is credited to accounts receivable.
• C)A typical business credit report provides sufficient information to eliminate the need for informed human judgment in the credit decision.
• D)A customer's credit quality is usually determined in terms of the probability of the customer's default.
• E)Computers have had a significant effect in increasing efficiency in the areas of payroll and inventory, but have had little impact in accounts receivable management.

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Definitions:

ABC Model

A framework used in psychology, particularly in cognitive-behavioral therapy, that describes the interrelation between affect (emotions), behavior, and cognition (thoughts).

Attitudes

A rephrased definition: Stable, learned predispositions to respond in a consistently favorable or unfavorable manner towards a given object or situation.

Cognitive Consistency

Cognitive Consistency refers to the desire of individuals to maintain harmony and consistency among their beliefs, attitudes, and behaviors to avoid dissonance.

Thoughts

Mental considerations, reflections, or meditations, often reflecting one's cognitive processes or attitudes.