A Company Can Limit the Amount of Credit Allowed to Customers

question 22

Multiple Choice

A company can limit the amount of credit allowed to customers in which of the following ways?

• A) Impose a time limit for payment
• B) Limit the amount of credit available for each customer
• C) Estimate the maximum total receivable figure the company can afford to finance
• D) All of the above

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Definitions:

Function

A relation between a set of inputs and allowable outputs, where each input is related to exactly one output.

Compounded Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Compounded Continuously

Pertains to the situation where interest is added to the principal balance of an investment, loan, etc., at an infinite number of times within a specified time period.

Balance

The equality between the sum of the debits and credits in an account, or the stability between opposing forces.