For a business, the advantage of offering credit to customers is that it:
A) increases the amount of sales.
B) increases cash flow from financing activities.
C) decreases cost of goods sold.
D) decreases the amount of inventory the company needs to carry.

Question

Quizplus · Accepted Answer

Offering credit to customers allows them to make purchases even when they do not have immediate cash available. This can increase the amount of sales for the business as customers are more likely to buy when they have the option to pay later.

Note: B, C, and D are not correct answers as they do not accurately describe the advantage of offering credit to customers.

For a Business, the Advantage of Offering Credit to Customers