Which of the following is an incorrect statement of an issue involved in receivables management?
A)Easier credit increases sales
B)Easier credit increases bad debt losses
C)Easier credit lowers the cost of financing receivables
D)Easier credit improves customer relations

Question

Quizplus · Accepted Answer

Easier credit may increase sales (A) and improve customer relations (D), but it may also increase bad debt losses (B) as customers may not pay their debts. Easier credit may also increase the cost of financing receivables, as more money will be tied up in accounts receivable for a longer period of time, potentially leading to higher interest charges and administrative costs. Therefore, statement C is incorrect.

Which of the Following Is an Incorrect Statement of an Issue