Which of the following is a disadvantage of providing credit to customers?
A) It delays the receipt of cash.
B) It decreases the sales revenue.
C) It lowers the chances of repeat business.
D) It increases the cost of selling.

Question

Quizplus · Accepted Answer

Providing credit to customers delays the receipt of cash and can create cash flow problems for a business. Other options are not disadvantages of providing credit to customers: B is incorrect because providing credit can actually increase sales revenue; C is incorrect because providing credit, if managed properly, can increase the chances of repeat business; and D is incorrect because providing credit does not necessarily increase the cost of selling.

Which of the Following Is a Disadvantage of Providing Credit