Match the items of List – I with List – II. List-IList-II (a) Credit limit (i) Criteria which a firm…
In accounts receivable management: Credit limit is the maximum credit amount extended to a customer at a point in time (a-iii); Cash discount is offered for early payment…
Choose your answer
Match the items of List – I with List – II.
| List-I | List-II |
|---|---|
| (a) Credit limit | (i) Criteria which a firm follows in selecting customers for the purpose of credit extension. |
| (b) Cash discount | (ii) Specifies duration of credit and terms of payment by customers. |
| (c) Credit standards | (iii) Maximum amount of credit which the firm will extend at a point of time. |
| (d) Credit terms | (iv) Given for receiving payments before than the normal credit period. |
Answer and explanation
Correct answer C
In accounts receivable management: Credit limit is the maximum credit amount extended to a customer at a point in time (a-iii); Cash discount is offered for early payment before the normal credit period expires (b-iv); Credit standards are the qualification criteria used to select credit customers (c-i); and Credit terms specify the credit duration and payment terms (d-ii), matching -(iii), (b)-(iv), (c)-(i), (d)-(ii).
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UGC NET Management