Why Is It Necessary for a Business Firm to Establish

Multiple Choice

Why is it necessary for a business firm to establish a credit policy?

A) A credit policy is necessary to determine how much money the business can borrow to purchase supplies.
B) A credit policy is necessary to determine how dividends will be distributed to the shareholders.
C) A credit policy is necessary to determine which suppliers the firm needs to pay.
D) A credit policy is a means of accounting for the dollar value of inventory-in-process.
E) A credit policy provides financial managers with expected dates of payment from buyers of the firm's products and services.