Credit approval policies are implemented by organizations primarily to accomplish which of the following objectives?
A) To determine revenue recognition policies.
B) To ensure customer satisfaction.
C) To prevent lapping by the accounts receivable department.
D) To ensure the realization of receivables.

Question

Quizplus · Accepted Answer

Credit approval policies are implemented to ensure the realization of receivables. These policies help to evaluate the creditworthiness of customers and mitigate the risk of bad debts or non-payment. By approving credit for customers who are likely to pay on time, organizations can ensure smoother cash flow and improve their overall financial health.

Credit Approval Policies Are Implemented by Organizations Primarily to Accomplish