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What risk increases by giving too many credit sales in handicrafts?

Answer and explanation

Correct answer: The risk of delayed or non-payment by customers may increase

Excessive credit sales increase the risk that customers may pay late or may not pay at all. This can leave an artisan short of cash for raw materials, wages, and other expenses. Option A is a possible consequence of this risk, whereas option B states the risk directly. Exam tip: distinguish between the collection risk in credit sales and its effect on cash flow.

Related tags

HandicraftsCredit SalesTrade CreditCollection RiskCash FlowArtisan BusinessTraditional Occupations In India HandicraftsWorkLivelihood And Career

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