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.

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Definitions:

Contingencies of Power

The specific conditions or situations that influence the extent to which individuals or groups can use power effectively in an organization.

Substitutability

The degree to which one product, service, or resource can be replaced by another without losing functionality or value.

Referent

A term or concept used to refer to or signify another thing; in leadership, it often refers to the natural influence or charisma of the leader.

Utilitarian

An ethical framework that focuses on the outcomes of actions, aiming to maximize overall happiness and minimize harm.