Which of the following statements are true?
I.New companies must be prepared to incur more bad debts than established businesses as part of the cost of building up a good-customers list.
II.Generally, repeat orders warrant easier credit terms.
III.Companies with high profit margins need to be particularly careful about extending credit to high-risk customers.
A)I only
B)II only
C)III only
D)I and II only

Question

Quizplus · Accepted Answer

Statement I is true because new companies do not have an established customer base, so they may need to offer easier credit terms to attract customers, which can lead to more bad debts. Statement II is also true because repeat orders indicate a level of trust and reliability in the customer and may justify easier credit terms. Statement III is false because companies with high profit margins may have more flexibility in absorbing bad debts, but they still need to carefully assess the creditworthiness of high-risk customers to prevent losses.

Which of the Following Statements Are True