One of the disadvantages of selling on credit is
- reduction in turnover
- reduction in profit
- increase in liquidity
-
bad debts
The correct answer is: D
Explanation
When selling on credit, there is always a very high possibility that some of your creditors will not pay up as at when due or may fail to pay at all. These unpaid credits are considered bad debts in business. Hence it is one of the disadvantages of credit sales as the seller is unlikely to recover all their debts.