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WAEC Commerce 2021 Question 10

Question 10

Purchase and Sale of Goods

One of the disadvantages of selling on credit is

  1. A.reduction in turnover.
  2. B.reduction in profit.
  3. C.increase in liquidity.
  4. D.increase in bad debts.
Show the answer and explanation

Answer: D (increase in bad debts.)

Explanation

When goods are sold on credit some buyers never pay, so bad debts rise.