Relaxation of credit policy results in:
A)an increase in credit sales.
B)a decrease in credit expenses.
C)a decrease in investment in receivables.
D)b and c
E)All of the above

Question

Quizplus · Accepted Answer

Relaxation of credit policy typically leads to an increase in credit sales as more customers are able to buy on credit due to less stringent credit terms. This does not necessarily mean a decrease in credit expenses or a decrease in investment in receivables; in fact, both might increase due to the higher volume of credit sales and the need to manage and collect them.

Relaxation of Credit Policy Results In