Which of the Following Statements Is Not True

question 38

Multiple Choice

Which of the following statements is not true?

• A) If an entity is too generous in extending credit bad debts will occur.
• B) Generally, entities offer too much credit to customers.
• C) If credit policies are too strict valuable customers may be lost.
• D) A credit report from a credit rating agency is an important method of checking on customer's credit history.

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Definitions:

Borrower Receives

The amount of capital a borrower obtains from a lender under the terms of a loan.

Return Requirement

The expected rate of return that an investment needs to generate to be considered worthwhile.

Cash Flows

The overall totality of financial exchanges inside and outside a company, deeply affecting its ability to have cash on hand.

Under-Valued

A term used to describe a security that is trading below its perceived true market value.