Extending credit to customers will not result in which of the following additional costs?
A)Increased wage costs will be incurred to evaluate customer creditworthiness,track what each customer owes,and follow up to ensure collection.
B)Bad debt expense will result when amounts cannot be collected from customers.
C)Delayed receipt of cash may result in requiring the company to take out short-term loans and incur interest costs.
D)Decreased gross profit from reduced sales.

Question

Quizplus · Accepted Answer

Extending credit typically does not decrease gross profit from reduced sales; instead, it may increase sales by allowing more customers to purchase on credit.

Extending Credit to Customers Will Not Result in Which of the Following