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Explain How a Company Can Use Its Credit Policy for Customers

question 19

Essay

Explain how a company can use its credit policy for customers and allowance for bad debts policies to manipulate earnings.


Definitions:

OASDI

Old-Age, Survivors, and Disability Insurance, a comprehensive federal benefits program that includes retirement, disability, and survivors benefits.

State Income Tax

A tax levied by a state on the income of its residents and businesses operating within its jurisdiction.

Federal Income Tax

The annual income of individuals, corporations, trusts, and other legal organizations is subject to taxation by the IRS.

Gross Pay

It's the total amount of compensation that an employee receives before any deductions, such as taxes and retirement contributions, are made.

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