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what would be the surest way to illuminate the possibility of having any bad debts? Why...

what would be the surest way to illuminate the possibility of having any bad debts? Why don’t companies operate this way if we could help them eliminate this costly expense?
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The surest way to eliminate bad debt expense is to make all sales on cash and not have a credit policy. In this way there will be no collection of credit sales and cash is collected as and when goods are sold. Companies do not operate this way because as per evolving trade practices it is not in reality to sell all goods on cash. Also, many firms may not be willing to pay cash unless they have made the final sale and hence may require credit. Firms may also have other receivables and hence may not have liquid cash to make cash purchases always which makes them buy on credit.

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