Which of the following argues for extending credit?
A) an increase in sales and an increase in collection costs
B) an increase in bad debt expense and a decrease in collection costs
C) an increase in both carrying costs and in sales
D) an increase in both sales and inventory turnover

Question

Which of the following argues for extending credit?​
A) ​an increase in sales and an increase in collection costs
B) ​an increase in bad debt expense and a decrease in collection costs
C) ​an increase in both carrying costs and in sales
D) ​an increase in both sales and inventory turnover

Quizplus · Accepted Answer

Option D argues for extending credit as it suggests an increase in sales and inventory turnover, both of which can be beneficial for a business. This indicates that customers are buying more and the business is able to move inventory more quickly, potentially leading to increased profits.

Which of the Following Argues for Extending Credit?​

Which of the Following Argues for Extending Credit?