The Primary Reason for a Business to Allow Customers to Purchase

question 95

Multiple Choice

The primary reason for a business to allow customers to purchase goods or services on account is to:

• A)decrease the marketability of the company's inventory.
• B)increase cash flow from financing.
• C)decrease cost of goods sold.
• D)increase sales.

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Definitions:

Strip Bond

A kind of bond in which the main amount and the periodic interest payments are detached and marketed separately as zero-coupon bonds.

Strip Bond

A bond variant where the capital and ongoing interest payments are split and each sold as separate zero-coupon bonds.

Compounded Semi-annually

Interest that is compounded and added to the principal twice per year, emphasizing the process of growth due to reinvestment of interest.

Issue Price

The price at which a new issue of securities is offered to the public.