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One of the disadvantages of selling on credit is

Commerce
WAEC 2021

One of the disadvantages of selling on credit is

  • A. reduction in turnover
  • B. reduction in profit
  • C. increase in liquidity
  • D. bad debts
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
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Correct Answer: Option D
Explanation

When selling on credit, there is always a very high possibility that some of your creditors will not pay up as at when due or may fail to pay at all. These unpaid credits are considered bad debts in business. Hence it is one of the disadvantages of credit sales as the seller is unlikely to recover all their debts.


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WAEC offline past questions - with all answers and explanations in one app - Download for free
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC offline past questions - with all answers and explanations in one app - Download for free