Extending credit to customers will result in which of the following additional costs?
A)Increased employer costs will be incurred to evaluate customer credit worthiness,track what each customer owes,and follow up to ensure correction.
B)Bad debt expense will result when amounts cannot be collected from customers.
C)Delayed receipt of cash may result requiring the company to take out short-term loans and incur interest costs.
D)All of the above.

Question

Quizplus · Accepted Answer

Extending credit to customers will result in increased employer costs to evaluate customer credit worthiness, track what each customer owes, and follow up to ensure correction. This can further result in bad debt expense when amounts cannot be collected from customers, and delayed receipt of cash may require the company to take out short-term loans and incur interest costs. Therefore, all of the options mentioned in the question are additional costs associated with extending credit to customers.

Extending Credit to Customers Will Result in Which of the Following