(c) The requirement is to identify the definition of
collection policy. Answer (c) is correct because a firm’s collection
policy is the diligence used to collect slow paying accounts.
Answer (a) is incorrect because the discount policy is the policy
regarding the percentage discount given for early payment. Answer
(b) is incorrect because the credit policy is a firm’s requirements
for customers in order to grant them credit. Answer (d) is
incorrect because the pay-ables policy is unrelated to accounts