A firm's credit policy consists of which of the following items?
A) credit period, cash discounts, credit standards, receivables monitoring
B) credit period, cash discounts, credit standards, collection policy
C) credit period, cash discounts, receivables monitoring, collection policy
D) cash discounts, credit standards, receivables monitoring, collection policy

Question

Quizplus · Accepted Answer

A firm's credit policy typically includes the credit period (how long customers have to pay), cash discounts (if offered), credit standards (the criteria for extending credit to customers), and collection policy (how past-due accounts are handled). Receivables monitoring is also often included, but is not as fundamental as the other items listed. Therefore, the best choice is B which includes all the fundamental items.

A Firm's Credit Policy Consists of Which of the Following