A firm's financial managers should always attempt to set a credit policy that will result in no bad debts.

Question

Quizplus · Accepted Answer

It is not realistic or feasible for a firm to have no bad debts. Some level of bad debts is inevitable and expected, and a strict credit policy that attempts to eliminate all bad debts may also result in lost sales and revenue opportunities. The goal is to set a credit policy that minimizes the risk of bad debts while also balancing the need for sales growth and customer satisfaction.

A Firm's Financial Managers Should Always Attempt to Set a Credit