Which items does a firm's credit policy consist of?
A)credit period, cash discounts, credit standards, receivables monitoring
B)credit period, cash discounts, credit standards, collection policy
C)credit period, cash discounts, receivables monitoring, collection policy
D)cash discounts, credit standards, receivables monitoring, collection policy

Question

Quizplus · Accepted Answer

A firm's credit policy consists of credit period, cash discounts, credit standards, and collection policy. Receivables monitoring is not part of the credit policy but a process in which firms monitor their accounts receivable to ensure timely payments and minimize bad debt. Therefore, option B is the best choice as it includes all the correct items of a credit policy.

Which Items Does a Firm's Credit Policy Consist Of