Introduction Flashcards
1
Q
Why would a business sell its goods and services on credit?
A
To increase its sales revenue.
2
Q
What is credit sales?
A
It means to provide the business’ goods and services to its customers first and collect money from the customers later.
3
Q
What risk does a business face when it sells its goods and services on credit to its customers?
A
It faces the risk of not being able to collect the money from the credit customers subsequently.
4
Q
What happens when a business is unable to collect money from its credit customers?
A
It will suffer losses.
