Which of the Following Elements of Credit Terms Might Discourage

question 21

Multiple Choice

Which of the following elements of credit terms might discourage purchasers from paying with a discount?

• A)A higher discount percentage with shorter payment period.
• B)A shorter payment period with longer discount period.
• C)A longer discount period with higher discount percentage
• D)A longer payment period with lower discount period.

Understand the balance of payments and its components.

Grasp the impact of tariffs, quotas, and other trade restrictions on international trade.

Recognize the importance of cultural and language differences in international business activities.

Understand the role of exchange rates in international trade.

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred, such as selling, general, and administrative expenses.

Opportunity Cost

The cost of forgone alternatives when one option is chosen over another.

Administrative Expense

Costs related to the general operation and administration of a business, including salaries of executive personnel, office supplies, and utilities.

Direct Labor Cost

The total cost of wages paid to labor directly involved in the production of goods or services.