If a company did not extend credit to customers:
A)gross revenue would increase.
B)costs would increase but so would sales revenue.
C)costs would decrease but so would sales revenue.
D)gross profit would increase.

Question

Quizplus · Accepted Answer

The advantage of extending credit is that it helps business customers buy products and services,thereby increasing the seller's revenues.However,extending credit introduces additional costs such as increased wage costs,bad debt costs,and delayed receipt of cash.As a result,if a company chooses not to extend credit to customers,its revenues and costs would be expected to decrease.

If a Company Did Not Extend Credit to Customers