Which one of the following best defines the term collection policy?
A)Process of determining which customers will be granted credit
B)Process of determining the probability that customers will not pay
C)Set of guidelines used by a firm to determine the cost of offering credit to its customers
D)Daily process of handling cash inflows and outflows of cash
E)Set of procedures a firm follows in collecting accounts receivable

Question

Quizplus · Accepted Answer

Collection policy refers to the set of procedures a firm follows in collecting accounts receivable, including how and when to follow up with customers who have outstanding balances. This can include things like billing and payment terms, customer communication, and how to handle delinquent accounts.

Which One of the Following Best Defines the Term Collection