Question: Why do companies issue credit when their past experience indicates
Why do companies issue credit when their past experience indicates that some customers will not pay?
Answer to relevant QuestionsHow much interest will be due at maturity for each of the following interest-bearing notes? What documents must be present to trigger the recording of a sale (and associated receivable) in the accounting records? What are sales allowances? How do sales allowances differ from sales discounts? Clarissa Company has credit sales of $550,000 during 2011 and estimates at the end of 2010 that 2.5 percent of these credit sales will eventually default. Also, during 2011 a customer defaults on a $775 balance related to ...Link Communications programs voicemail systems for businesses. For a recent project they charged $135,000. The customer secured this amount by signing a note bearing 9 percent interest on February 1, 2011. Required: 1. ...
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