Which One of the Following Is NOT One of the Three

question 38

Multiple Choice

Which one of the following is NOT one of the three steps involved in establishing a credit policy?

• A)Establishing credit payment patterns
• B)Establishing credit standards
• C)Establishing a collection policy
• D)Establishing credit terms

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Definitions:

Accrual Basis

The accrual basis of accounting records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.

Cash Basis

An accounting method where revenues are recognized when cash is received, and expenses are recorded when cash is paid.

Debit Portion

The side of an accounting entry that increases asset or expense accounts or decreases liability, equity, or revenue accounts.

Asset Account

A category in accounting ledgers that records the increases and decreases in specific assets owned by a business.