Which of the Following Is an Advantage of Using Credit

question 29

Multiple Choice

Which of the following is an advantage of using credit?

• A)It increases the need to cover cash flow shortages.
• B)It increases the number of cheques written.
• C)It does not affect your cash flow statement.
• D)It reduces the need to carry cash.

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Definitions:

Account Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Repeat Purchases

The act of customers buying the same product or service multiple times, indicating satisfaction and loyalty towards a brand.

Bad Debt Expense

An accounting term representing the amount of non-collectible accounts receivable that is considered a loss.

Profit

The financial gain realized when the revenue from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.