Meat Packers International Company is the sole employer in the only city in a small province. Recent changes in government subsidies have caused Meat Packers to consider relocating to a larger city in a larger province. Mel Mott, the owner of Mel’s Department Store, is concerned as to what will happen to the collectibility of the store’s accounts receivable if Meat Packers relocates and puts most of his customers out of work. This situation is called:
A. A shared characteristic.
B. A concentration of credit risk.
C. The direct write off method.
D. Factoring of Accounts Receivable.
Answer:B
Meat Packers International Company is the sole employer in the only city in a small province. Recent changes in government subsidies have caused Meat Packers to consider relocating to a larger city in a larger province. Mel Mott, the owner of Mel’s Department Store, is concerned as to what will happen to the collectibility of the store’s accounts receivable if Meat Packers relocates and puts most of his customers out of work. This situation is called:
A. A shared characteristic. B. A concentration of credit risk. C. The direct write off method. D. Factoring of Accounts Receivable.