Allowing customers to receive goods and services now and pay for these latter is another use of the word Credit.
Discuss why a company would provide goods and services now and allow someone to pay latter.
What factors should a company consider when allowing a customer to postpone payment? When should a company consider that some customers are not going to honor their debt?
How does the realization that some customers are not going to pay impact the operations of the company?
Provide supportive statements for which method of accounting for Bad Debts is more appropriate under various situations.