Asked by Chase Coley on Jul 01, 2024
Verified
The credit period will typically be longer the ___________________.
A) Higher the credit risk of the buyer.
B) greater the competition
C) Higher the consumer demand for the product.
D) Higher the perishability of the product.
E) Smaller the size of the customer's account.
Credit Period
The time frame granted by a creditor within which payment for a purchase must be made; typically used in commercial transactions.
Credit Risk
The risk of loss resulting from a borrower's inability to repay a loan or meet contractual obligations.
- Recognize the factors influencing credit terms and their impact on buyer and seller cash flows.
Verified Answer
ZK
Zybrea KnightJul 02, 2024
Final Answer :
B
Explanation :
Greater competition often leads to suppliers offering more favorable credit terms, such as longer credit periods, to attract or retain customers.
Learning Objectives
- Recognize the factors influencing credit terms and their impact on buyer and seller cash flows.