The likelihood of loss because of the failure of the other party to fully pay the amount owed is called
A) accounting risk.
B) bad debts.
C) credit risk.
D) currency risk.

Question

Quizplus · Accepted Answer

Credit risk refers to the possibility of loss due to the failure of the other party to pay back the amount owed. Accounting risk is not directly related to payment default, bad debts are a consequence of credit risk, and currency risk refers to the possibility of loss due to fluctuations in exchange rates.

The Likelihood of Loss Because of the Failure of the Other