A company can mitigate bad debt expense by
A)extending payments terms.
B)not charging interest on late payments.
C)performing credit checks.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Performing credit checks allows a company to evaluate the creditworthiness of its customers before extending credit to them. This can help the company avoid customers who are likely to default on payment, thereby reducing bad debt expense. Extending payment terms or not charging interest on late payments may actually increase the likelihood of bad debt, as customers may be more likely to delay or default on payment if there are no consequences.

A Company Can Mitigate Bad Debt Expense by