Credit sales - SS2 Commerce Past Questions and Answers - page 1
What are credit sales?
Selling goods or services for immediate cash
Selling goods or services at a discount
Selling goods or services on credit, allowing payment at a later date
Selling goods or services on credit, allowing payment at a later date
What is the basis for credit sales?
Trust and relationship with customers
Availability of cash on hand
Competitive pricing strategy
What is an advantage of credit sales?
Immediate cash flow and reduced administrative costs
Increased sales and customer loyalty
Decreased competition and higher profit margins
What is a potential disadvantage of credit sales?
Reduced administrative costs and increased cash flow
Higher profit margins and decreased competition
Risk of bad debts and cash flow challenges
What additional tasks are associated with credit sales?
Product development and marketing
Credit checks, invoicing, and collections
Employee training and recruitment
Define credit sales in simple terms.
Credit sales refer to the practice of selling goods or services to customers on credit, allowing them to make payment at a later date.
What is one potential advantage and one potential disadvantage of credit sales?
One potential advantage of credit sales is increased sales and customer loyalty. One potential disadvantage is the risk of bad debts and cash flow challenges.