The Goal of a Successful Credit Policy Is to Maximize

question 126

Multiple Choice

The goal of a successful credit policy is to maximize the potential profit on total credit sales while

• A) limiting credit losses to an acceptable level.
• B) minimizing the number of credit customers.
• C) keeping credit sales as low as possible.
• D) selling only to customers who will pay.

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Definitions:

Receivables

Amounts owed to a company by its customers for goods or services delivered on credit.

Control Activity

Measures implemented to ensure that management's directives are carried out, aiming to prevent, detect, and correct financial misstatements or fraud.

Extensive Marketing Plan

A comprehensive strategy outlining marketing efforts, targeting how a business will effectively engage customers, compete in the market, and achieve its marketing goals.

Segregation Of Duties

An internal control method used to prevent fraud and errors, which involves dividing tasks and responsibilities among different people to ensure no single individual controls all aspects of a transaction.