A company can limit the amount of credit allowed to customers in which of the following ways?
A) Impose a time limit for payment
B) Limit the amount of credit available for each customer
C) Estimate the maximum total receivable figure the company can afford to finance
D) All of the above

Question

Quizplus · Accepted Answer

All of the above options are valid ways for a company to limit the amount of credit allowed to customers. Imposing a time limit for payment ensures that customers do not extend their credit indefinitely. Limiting the amount of credit available for each customer ensures that the company does not extend more credit than it can afford. Estimating the maximum total receivable figure the company can afford to finance ensures that the company's overall financial health is not negatively impacted by providing credit to customers.

A Company Can Limit the Amount of Credit Allowed to Customers