Credit analysis is best described as the process of:
A)collecting an accounts receivable.
B)determining the optimal credit terms.
C)establishing the length of the credit period.
D)setting the amount of discount to be granted.
E)determining the probability that a customer will not pay.

Question

Quizplus · Accepted Answer

Credit analysis involves assessing the creditworthiness of a customer and determining the risk of default. This involves analyzing various factors such as financial statements, credit history, industry trends, and economic conditions to determine the probability that a customer will not pay. Thus, option E is the most appropriate description of credit analysis. Options A, B, C, and D are related to credit management activities, which are part of the broader credit function but not specifically related to credit analysis.

Credit Analysis Is Best Described as the Process Of