Credit Policy Requires 1) Establishing the Terms of Credit

question 50

Multiple Choice

Credit policy requires
1) establishing the terms of credit
2) determining to the amount of any discount
3) determining the collection policy​

• A)​1 and 2
• B)​1 and 3
• C)​2 and 3
• D)​1, 2, and 3

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate product cost.

Activity Rates

The costs or rates associated with specific activities used in activity-based costing to allocate expenses to products or services.

Activity Cost Pool

A way to aggregate all indirect costs associated with a particular activity, aiding in more accurate cost allocation.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the manufacturing process or providing service to customers.