The primary reason for a business to allow customers to purchase goods or services on account is to:
A)increase sales.
B)increase cash flow from financing.
C)decrease cost of goods sold.
D)decrease the marketability of the company's inventory.

Question

Quizplus · Accepted Answer

Allowing customers to purchase goods or services on account can increase sales as it provides them with the opportunity to buy products without needing cash upfront. This can encourage customers to make purchases they might not otherwise make if only cash or credit card payments were accepted.

Note: B is incorrect as allowing customers to purchase on account would not increase cash flow from financing as the money collected from customers would not come in immediately. C and D are also incorrect as allowing customers to purchase on account would not decrease the cost of goods sold or the marketability of the company's inventory.

The Primary Reason for a Business to Allow Customers to Purchase