Which of the Following Actions Would NOT Be Considered Good

question 19

Multiple Choice

Which of the following actions would NOT be considered good management of accounts receivable?

• A) assessing creditworthiness of new or potential customers
• B) very loose or flexible credit terms to encourage sales
• C) offering discounts to encourage faster payment
• D) regular aged receivables analysis

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Definitions:

Deadweight Loss

A reduction in economic productivity happens when a good or service fails to reach or cannot attain its equilibrium state.

Output

The total amount of goods or services produced by a person, machine, or industry during a given period.

Price Taking Firm

A company that must accept the market price for its product, as it has no power to influence the price due to intense competition or market conditions.

Maximum Profit

The highest possible financial gain an entity can achieve in a given period, usually by optimizing sales and minimizing costs.