The increase in bad debts associated with tightening credit standards raises bad debt expenses and has a negative impact on profits.

Name: The increase in bad debts associated with tightening credit standards raises bad debt expenses and has a negative impact on profits.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Tightening credit standards typically leads to a decrease in bad debts because stricter criteria are applied to whom credit is extended, reducing the likelihood of default.

The Increase in Bad Debts Associated with Tightening Credit Standards