"Concentrations of credit risk" occur if:
A) A significant portion of receivables are due from a few major customers.
B) A significant portion of receivables are from customers in the same industry.
C) Both of the above.
D) Neither of the above.

Question

Quizplus · Accepted Answer

Concentrations of credit risk can occur if a significant portion of receivables is due from a few major customers or if a significant portion of receivables is from customers in the same industry. Both of these scenarios can increase the risk of default or non-payment, which can have a significant impact on a company's financial performance. Therefore, choice C (both of the above) is the best answer.

"Concentrations of Credit Risk" Occur If