Which one of the following is the process of determining the probability that customers will not pay?
A)Credit analysis
B)Collection policy
C)Account aging
D)Credit terms
E)Customer invoicing

Question

Quizplus · Accepted Answer

Credit analysis involves evaluating a customer's creditworthiness, including the probability that they will not pay their bills. This process typically includes reviewing credit reports, financial statements, and other information to estimate the likelihood of default. Collection policy refers to the strategy that a company uses to collect unpaid debts, while account aging is a report showing how long invoices have been outstanding. Credit terms refer to the specific payment conditions agreed upon between a buyer and seller, and customer invoicing is the process of billing customers for products or services rendered.

Which One of the Following Is the Process of Determining