An Escalator Clause Ensures That the Customer Does Not Incur

question 101

True/False

An escalator clause ensures that the customer does not incur financial hardship as a result of increases to the cost of a product.

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Definitions:

Cost of Goods Sold

The expenses directly tied to the creation of the products sold by a business.

Collections

The process of pursuing payments of debts owed by individuals or businesses, typically involving accounts receivable.

Accounts Receivable

The money owed to a company by its customers for goods or services delivered but not yet paid for.

Credit Sales

Sales made by a business where payment is deferred, allowing the customer to pay at a later date.