The Accounts Receivable Approach to Credit Policy Supports the Theory

question 49

Multiple Choice

The accounts receivable approach to credit policy supports the theory that:

• A)a firm's risk of offering credit to a new customer is limited to the variable cost of the sold items.
• B)the best credit policy is an all-cash policy.
• C)the cost of offering credit to a new customer is the same as the cost of offering credit to an existing customer.
• D)foregoing cash discounts is a method of obtaining inexpensive short-term financing.
• E)the default risk of a credit policy is the same as the default risk under an all cash-policy if your customers remain the same.

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Definitions:

Organ of Corti

The Organ of Corti is a structure in the cochlea of the inner ear that contains hair cells, which convert sound vibrations into nerve impulses.

Malleus, Incus, Stapes

The three small bones in the middle ear that transmit sound vibrations from the eardrum to the inner ear.

Cochlear Duct

A spiral-shaped cavity in the cochlea that plays a critical role in the process of hearing by converting sound vibrations into neural signals.

Cochlear Duct

A spiral-shaped cavity within the cochlea of the inner ear, playing a crucial role in converting sound vibrations into nerve impulses.