Asked by
Jacqueline Lopez
on Dec 01, 2024Verified
Criteria for extending credit to new customers usually involve the following issues:
(1)length of time in business
(2)adequate net worth
(3)an acceptable current ratio
(4)a "clean" credit record.
Extending Credit
The practice of lending money or goods with the expectation of repayment in the future, often with interest.
Current Ratio
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.
- Recognize the criteria for extending credit to new customers.
Verified Answer
GS
Learning Objectives
- Recognize the criteria for extending credit to new customers.