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:

Consortium

A group of companies or institutions formed to undertake an enterprise or project together, often pooling resources for a common goal.

Market Advantage

Market advantage refers to a strategic edge one company holds over competitors within its industry or market, often leading to stronger sales or brand loyalty.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and is recognized as such by law with rights and liabilities that are distinct from those of its members.

Legal Entity

An organization or structure that has legal rights and obligations, including the ability to enter into contracts and sue or be sued.