Which of the Following Is Not True Concerning Considerations in Setting

question 58

Multiple Choice

Which of the following is not true concerning considerations in setting a credit policy?

• A) A firm that supplies a perishable product will tend to offer restrictive credit terms.
• B) A firm whose customers are in a high-risk business will tend to offer restrictive credit terms.
• C) Lengthening the credit period effectively reduces the price paid by the customer.
• D) Small accounts, associated with firms that find it difficult to acquire a line of credit, tend to receive longer credit periods.
• E) None of these.

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Definitions:

Zeitgeber

Environmental event that entrains biological rhythms; German for “time giver.”

Entrained

The synchronization of an organism's circadian rhythms to that of an external rhythm in its environment.

Biological Rhythms

Natural cycles of physical, mental, and behavioral changes that follow a periodic, predictable pattern, such as circadian rhythms or menstrual cycles.

Earth Orbiting

The path followed by an object, such as a satellite, as it revolves around the Earth under the influence of gravitational force.