A restrictive short-term ﬁnancial policy tends to:
A) Reduce future sales more so than a ﬂexible policy.
B) Grant credit to more customers.
C) Incur more carrying costs than a ﬂexible policy does.
D) Encourage credit sales over cash sales.
E) Reduce order costs as compared to a more ﬂexible policy.

Question

Quizplus · Accepted Answer

A restrictive short-term financial policy means that the company is limiting their credit offerings and may require customers to pay in cash or with shorter payment terms. This can discourage potential customers from making purchases, resulting in reduced future sales. A more flexible policy may allow for greater credit offerings, potentially attracting more customers and resulting in higher sales.

A Restrictive Short-Term ﬁNancial Policy Tends To