The possibility of unpaid accounts is not considered a cost of extending credit to customers.
Explanation:
- There is always a chance that the customer will not be charged on credit for the goods and services that you provide.
- Though, if you exert the proper measures to review these credit records of the client, make an upfront payment, and keep on top of the unpaid invoices, this risk can be minimized.
- So that the possibility of unpaid accounts is not considered a cost of extending credit to customers.