The following statement pertains to credit policy: The cost of sales will initially be delayed when a
credit policy is ﬁrst adopted.

Name: The following statement pertains to credit policy: The cost of sales will initially be delayed when a credit policy is ﬁrst adopted.
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Question

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When a credit policy is adopted, the cost of sales is typically realized earlier because customers are now able to delay their payments. This can lead to a cash flow issue for the business in the short-term.

The Following Statement Pertains to Credit Policy: the Cost of Sales