Once a Small Business Has Established a Firm Written Credit

question 86

Multiple Choice

Once a small business has established a firm written credit policy and communicated it,the next step in building an effective credit policy is to:

• A)send invoices promptly.
• B)determine what percentage of sales is being written off as bad debt.
• C)create a simple credit application.
• D)create a "tracking file" of events.

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Definitions:

Expenditures

The financial outflows or payments made by an individual, organization, or government unit, usually for goods or services.

Average Product

The output per unit of input, calculated by dividing total output by the quantity of inputs used.

Production Possibilities

Different combinations of goods and services that an economy can produce efficiently with its available resources and technology.

Diminishing Returns

The principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.