Which one of the following statements is false as it relates to considerations f

Question

Which one of the following statements is false as it relates to considerations firms use when establishing a credit policy?

A. a firm that supplies a perishable product will tend to offer restrictive credit terms

B. a firm whose customers are in a high risk business will tend to offer restrictive credit terms

C. lengthening the credit period effectively reduces the price paid by the customer

D. small accounts, associated with firms that find it difficult to acquire in a line of credit, tend to receive longer credit periods

E. larger accounts tend to receive more favorable credit terms

Explanation / Answer

Option (D) is False

Statement in option D is false and other statements are true.Generally small accounts associated with the firm do not receive longer credit periods.In fact larger accounts gets more favourable credit terms

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