A business that extends credit to buyers should establish:

Question

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A business that extends credit to buyers should establish both credit policies to determine who can receive credit, and how much credit they can receive, and collection policies to outline the process for collecting overdue payments. By combining these two policies, the business can establish clear expectations for customers and create a structured approach to dealing with credit and collections. Income debit policies are not relevant to credit extension and therefore are not necessary.

A Business That Extends Credit to Buyers Should Establish