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  • Essay / Bella Boutique Case Analysis - 931

    They also sign to indicate that they accept any additional charges from Bay Corp if they are late in their payments and Tony needs Bay Corp to pursue them. When customers ask about credit accounts, some say they can pay a certain amount per week. This number can be used to decide the customer's limit. The customer may want to set a limit or they have not had a previous credit account and are young, which means Tony will set a credit limit of $100 until he feels the customer is reliable with its payments. To decide a customer's credit limit, if the customer says they can pay a certain amount per week, that number is multiplied by four to get the amount they can pay per month. For example, Ms. Claire has a credit limit of $2,000. Credit limits are important because they prevent the customer from purchasing more than they can afford. Credit limits at Bella Boutique are strictly enforced because most people set them themselves and don't want to spend more money than they can afford to pay. This ensures that customers will be able to pay Bella Boutique the amounts due. An example of this from the accounts receivable subsidiary ledgers is when B.